Bankinter: China is to adopt a “moderately loose/lax ’ monetary policy in 2025 to support economic growth. This is the first strategic shift in monetary policy since 2010 towards a ‘prudent’ monetary policy. In addition, the Politburo announces the implementation of more proactive fiscal policies, in order to ‘vigorously’ boost consumption and expand domestic demand in ‘all directions’.
Opinion of Bankinter’s analysis team: The Chinese government has five fixed monetary policy stances, with flexibility to change them when they see fit: (i) Lax, (ii) Moderately Lax, (iii) Prudent, (iv) Moderately Restrictive and (v) Restrictive. Despite the importance of this change, it remains unclear what measures will be implemented to sustain economic growth and support private consumption. Starting tomorrow, the Central Economic Work Conference is scheduled to take place. At this meeting, which is held every year, the government sets targets for the coming year.
