The People’s Bank of China reduced the base interest rate on five-year loans from 4.2 percent to 3.95 percent. Press release Central Bank of China. The regulator was closed for the first time since June 2023. The current rate level is the lowest in Chinese history.
In this way, Chinese authorities are trying to revive the real estate market, which is in deep crisis. The situation began to deteriorate during the pandemic and has worsened further as Beijing grapples with developers’ debt overload. The most striking example of the crisis in the country’s housing market was the collapse of China’s largest developer, Evergrande Group.
The crisis in the real estate market affects the entire country’s economy. Thus, China’s GDP growth at the end of last year was 5.2% against the forecast 5.3%.
Analysts predict that Chinese economic growth will slow to 4.6% in 2024. More negative forecasts show that the country’s GDP growth rate will drop to 2.9%.
Before reportedChina is facing record deflation amid a demand crisis.
Previous analysts warnedThat the crisis in the PRC economy can surpass the crushing collapse of 2015.