(Bloomberg) As China attempts to bottom out its economic slump, local governments will be allowed to issue bonds to buy unsold homes to support the struggling real estate sector.
Most Read Articles on Bloomberg
Finance Minister Lan Foan announced at a press conference on Saturday that authorities plan to use special municipal bonds and tools to support the real estate sector. He suggested that the central government has room to increase spending to ease the debt burden on local governments, such as by giving them a “large” one-off facility to exchange their debt for lower-interest bonds. promised further efforts.
“The central government still has considerable room to borrow and increase the deficit,” Lan said, adding that the government was “considering other measures” beyond the measures announced at the press conference. He did not disclose the amount that could be used to purchase a home using the special bond.
Fiscal support was the most missing part of the economic stimulus package that the Chinese government began rolling out in late September, with an unprecedented push led by the central bank that ranged from interest rate cuts to support for real estate and stock markets. .
Investors and economists surveyed by Bloomberg had expected the government to provide up to 2 trillion yuan in new fiscal stimulus ahead of the event.
Further increases in public spending are considered essential to rebuilding the world’s second-largest economy, but the country is under deflationary pressure and will not meet the government’s 2024 growth target of around 5%. There is a risk.
Investors are also closely watching Mr. Lan’s press conference for clues about how far Beijing intends to go on the growth-boosting efforts that have sparked a world-beating stock rally.
(Details will be updated from time to time)
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
