PIMCO says developed economies may require stimulus for longer than expected (because China)

Author: Eamonn Sheridan | Category: News

Pacific Investment Management Company (PIMCO) is a US firm that manages circa US$1.9 trillion in assets.

The firm have a publicly available piece posted in which they argue:
  • The  People's Bank of China have announced it has begun to reduce coronavirus-related stimulus early
  • policy tightening in China is already being felt domestically in the form of tighter money market liquidity, moderating private credit growth, and reduced government bond issuance
  • PBOC is targeting overall credit to grow in line with nominal GDP, implying the credit impulse will fall to around -3.5% of GDP by year-end, from a peak above 9% in the fourth quarter of 2020. All else equal, this may slow China's economic activity to below-trend levels by late 2022.
One of the key implications PIMCO cites is:
  • China provides a key engine of global growth ... If past is prologue, developed countries may be required to maintain stimulus measures for longer than presently expected.
Here is the link if you want to read quite a bit more. 
Pacific Investment Management Company (PIMCO) is a US firm that manages circa US$1.9 trillion in assets.

Invest in yourself. See our forex education hub.
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose