China: More stimulus are coming – Standard Chartered

The Chinese State Council announced more stimulus measures aimed at promoting investment, increasing support to SMEs and enhancing household welfare to help people affected by the epidemic, economists at Standard Chartered Bank brief.

Key quotes

“We now forecast a widening of China’s broad budget deficit to 8% of GDP in 2020 (from 6.5% previously). Last year, China implemented a broad-based budget deficit of 5.6% of GDP.”

“We maintain our forecast that the PBoC will cut the MLF rate by another 10bps in Q3, and the benchmark deposit rate by 25bps in Q2 (as soon as in April).”