China's Central Bank Policies: The Need for Fiscal Measures to Boost Consumer Demand

China's central bank has adopted a more aggressive easing stance but faces challenges in boosting consumer demand. Analysts argue that fiscal policies, such as higher pensions and social benefits, are essential to address the persistently weak consumer spending, despite recent monetary measures.

China's central bank has taken a more aggressive approach to easing, but this shift has yet to tackle the primary obstacle to economic growth: weak consumer demand.

Despite new liquidity injections and lower borrowing costs announced by the People's Bank of China, analysts believe that only fiscal policies aimed at putting money directly into consumers' pockets can stimulate spending. The world's second-largest economy is under immense deflationary pressure, risking the achievement of its 5% growth target due to a property market downturn and low consumer confidence.

Experts agree that additional fiscal measures are crucial, even as the central bank's latest moves have raised market expectations. However, the potential effectiveness of these monetary policies remains in doubt.

(With inputs from agencies.)