Market Outlook: China May Implement Fiscal Stimulus of 2-3 Trillion Yuan in the Coming Months

Nomura analysts argue that China's recent interest rate cuts on loans highlight Beijing's commitment to reducing borrowing costs and stimulating the economy. The analysts note that the significant cuts in both 1-year and 5-year LPRs were broadly anticipated; however, they still indicate that the PBOC is diligently fulfilling its mandate to lower borrowing costs in the real economy. Nomura expects Beijing to implement fiscal stimulus measures amounting to 2-3 trillion CNY in the coming months. The upcoming National People's Congress Standing Committee meeting could be a crucial window for fiscal policy announcements.