China’s economy will swiftly return to its potential growth rate, according to People’s Bank of China (PBOC) deputy governor Chen Yulu, who recently said economic indicators will likely show significant improvement in the second quarter and the country’s economy will return to potential output level rather swiftly. He did not announce any new stimulus measures.

Chen repeated earlier pledges to keep credit growth stable and make good use of the central bank’s targeted easing approach, according to global newswires.

Although industrial activity has restarted in the country following the COVID-19 pandemic, it is yet to hit normal levels, with many services business struggling and the outlook for exporters grim as the outbreak covers the rest of the world.

"Based on payments, deposits and loan data since March, China’s real economy is improving somewhat due to earlier targeted monetary policies, ” Chen said. The PBOC will continue to direct funding to private and small firms as well as those critical to the supply chain, he said.

China’s surveyed unemployment rate jumped in March to 6.2 per cent. While the virus’ impact on supplies and inflation will likely to continue for a while, price hikes will start to moderate as economy resumes, and inflation growth will slow from the second quarter and continue that way in the rest of the year, Chen added.

Fibre2Fashion News Desk (DS)

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