The Central Bank of China announced a record reduction in mortgage rates – Kommersant
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Central Bank of China reduced the base interest rate on five-year loans by 25 basis points, to 3.95%. This is a record one-time reduction in mortgage rates in the history of China. The rate is the benchmark for most mortgages in the country.
The Central Bank of China lowered the five-year lending rate for the first time since June last year. In this way, the country’s authorities are trying to encourage the population to buy housing in the midst of a serious crisis in the real estate market. It was provoked by the COVID-19 pandemic, on the one hand, and the intensified struggle of the authorities against the excessive debt burden of developers, on the other. And the most striking illustration of the crisis was collapse the country’s largest developer Evergrande Group.
The real estate sector is one of the pillars of the Chinese economy. And the crisis in this market drags on the entire economy. That according to the results of the fourth quarter of 2023 grew by 5.2% year on year, which was worse than analysts’ expectations, and compared to the previous quarter, the growth rate decreased from 1.5% to 1%.
Analysts predictthat China’s economic growth will slow to 4.6% in 2024. At the same time, S&P Global Ratings noted that a scenario is possible in which GDP grows by only 2.9%. The real GDP growth rate will depend primarily on the state of the real estate sector, experts noted.
China’s GDP grew by 5.2% at the end of the year – read in material “Kommersant”.
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