China's Central Bank Unveils Major Stimulus to Boost Economy

China's central bank introduced its largest stimulus since the pandemic to rejuvenate the economy, including funding and interest rate cuts. Analysts, however, caution that more fiscal measures are necessary to achieve growth targets. Despite the efforts, the response may fall short due to weak credit demand and unresolved property market issues.

China's central bank has rolled out its most substantial stimulus since the onset of the pandemic, aiming to pull the economy out of its deflationary state and steer it toward the government's growth targets. However, analysts warn that additional fiscal measures are essential for achieving these objectives.

This newly introduced package, which offers increased funding and interest rate cuts, is the latest effort by policymakers to restore confidence in the world's second-largest economy. Despite these steps, some experts question their effectiveness, pointing to weak credit demand from both businesses and consumers and the lack of measures to support real economic activities.

As Chinese financial markets rallied, Governor Pan Gongsheng announced several measures, including a reduction in reserve requirement ratios and the introduction of tools to stimulate the property and capital markets. Yet, economic indicators suggest that more robust action may be required to avert a prolonged structural slowdown.

(With inputs from agencies.)