But the suite of measures by the central bank so far is “not adding that much liquidity into the market in China,” Anderson noted, referring to the amount of funds available for spending and investment. “So, we should expect further easing ahead,” she added, without specifying the exact measures China would potentially take to stimulate its economy.
Anderson is not the only one with such views. Mark Williams, chief Asia economist at research firm Capital Economics, wrote in a note that China’s next possible “major step” is a cut to benchmark lending rates.
“We suspect the next major step that is not broadly anticipated will be a cut to benchmark lending rates,” Williams wrote last week.
“For all that though, no one should be expecting a rapid improvement in the economy … Given the downward pressures the economy is facing, we’re expecting stimulus only to arrest the slowdown in growth, probably around the middle of the year, but not to drive a significant rebound,” he added.