Fiscal policy is expected to stay broadly unchanged, but lower revenues may push the deficit above the indicative target of 2.7 per cent of GDP in 2015. Further widening of the budget deficit is expected in 2016 as more of local governments' off-budget activities are brought on budget. Monetary policy has to take into account the risks associated with high credit growth, but further interest rate liberalization and lower reserve requirements cannot be ruled out.
The Asian Development Bank's Annual Development Outlook Update 2015 says China's economic growth moderated to 7 per cent in the first half of 2015#
The projections are subject to the external upside risk of commodity prices slipping further and the downside risk of economic activity suffering a further setback in the major industrial countries. The recent stock market correction is unlikely to adversely impact consumption, investment, or financial stability. Economic activity is unlikely to be sensitive to wealth effects, as equities comprise only a small part of household wealth, corporate finance, and financial institutions' risk portfolios. (SH)
Fibre2Fashion News Desk – India
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