Macro Adjustment And Control Did Not Reach The &Nbsp When Direction Was Adjusted; Experts' Situation Was Very Different.

The macroeconomic data have been released, and it is time for the State Council to study and deploy the next stage of economic work. The 12 executive meeting of the State Council emphasized the continued strengthening of real estate regulation.

In the case of the domestic economic situation again rising inflation and declining growth, recently, the controversy over the domestic macroeconomic situation has become increasingly fierce, and there has been speculation in the market that the direction of macro-control policy may be adjusted. The main risks of future macroeconomic are inflation Or is economic growth going down? Is the main goal of regulation and control policies to control inflation or to maintain growth? Will the direction of macro adjustment policy be adjusted in the second half?

Economic situation reproduces big differences.

At present, from academia to policy makers, there is a big difference in judging the current economic situation. One group believes that the main risk at present is still high inflation, rather than economic growth. The goal of macroeconomic regulation and control should also be focused on controlling inflation and continuing to tighten. The other group believes that inflation is about to come down. It is no longer a big problem. If the policy is too tight, the current tightening policy is moderate and should not be further tightened against Ming Fan's risk of a sharp decline in economic growth.

The two quarter macroeconomic data have been released, and it is time for the State Council to study and deploy the next stage of economic work. Inflation data surged to 6.4% in June, and GDP growth slowed down 0.2 percentage points to 9.5% in the two quarter.

Speculation on policy adjustment Flooding the market

The domestic economic situation has again seen a complex situation of high inflation and declining growth. Recently, the controversy over the domestic macroeconomic situation and regulatory policies has intensified. The 12 executive meeting of the State Council held the direction of real estate regulation.

Wen Jiabao, premier of the State Council, held 4 economic symposiums 4 times from July 4th to July 11th. Wen Jiabao stressed that we should continue to take the overall level of stabilizing prices as the primary task of macroeconomic regulation and control. At the same time, we should improve the pertinence, flexibility and foresight of policies according to the changes of the situation. We should effectively grasp the intensity, rhythm and key points of macroeconomic regulation and control, handle the three relations of maintaining stable and rapid economic development, readjust the economic structure and manage the inflation expectations. We should not only increase the price increase but also bring about great fluctuations in economic growth.

This wording has been significantly adjusted compared with the setting up of the executive meeting of the State Council at the end of 4 this year. Wording It is "doing everything possible to keep the general price level basically stable." This is the primary task of this year's macroeconomic regulation and control, and also the most urgent task. We must carry out the comprehensive deployment of the State Council on stabilizing the general price level, and take various measures to comprehensively cope with the pressure of rising prices at home and abroad from the aspects of controlling money, developing production, ensuring supply, activating circulation and strengthening supervision.

Accordingly, the industry believes that the second half of this year's macroeconomic regulation and control may take the opportunity to move. The direction of tightening macro-control policy direction may make adjustments speculation flooding the market, stimulated by this, the stock market has also risen in recent two days.

Continue the retrenchment

Andy Xie

(Famous Economist)

Cao Yuan Zheng

(Bank of China [3.12 -0.32% shares) chief economist

At present, the overriding objective is to control inflation, and the leeway of policy is very limited. The key to inflation is to stabilize. This requires a combination of several factors. One is to keep bank deposits from depreciating. The two is that the increase in money supply is slowing down. The current growth rate is 16%. It is still too high. In the 90s of last century, inflation remained at 11%~12% level.

When monetary policy and regulation policies are not yet being adjusted, investment can still maintain a relatively high growth rate as long as affordable housing construction is in place. At present, domestic excess liquidity and liquidity contraction coexist. On the one hand, the currency is too loose and hot money is in flood; on the other hand, the credit crunch has led to the high interest rate of bank lending, and the interest rate of private lending has also gone up. Therefore, the current policy is a structural problem. We must solve the problem of combining market interest rate with market interest rate by combining market interest rate with market interest rate. One
 

Policy adjustment faction

Ren Ruo en

(Professor, School of economics and management, Beihang University)

Stephen Green

(economist at Standard Chartered Bank)

Inflation is not a particularly big problem at the moment, and pork prices will soon come down. But removing price factors, the growth rate of investment in June is negative. If the current tightening policy continues, there will be a significant decline next year. In addition, after the removal of price factors, the real income of urban residents increased by 7.6% in the second quarter, which was 2 percentage points lower than the GDP growth rate, which means consumption was not optimistic. This year, the risks of European and American economic problems are very great. If the domestic regulation policy is over again, the risk of rapid economic growth next year will be very large. The current tightening is in place and can be observed for some time.

The inflation figures for excluding pork are not high, and pork will rise in August, but it will slow down. It is estimated that inflation will peak in 6~7, and CPI will fall to around 4.5% by the end of the year. Although the economic growth slowed down in the two quarter, the signs of economic decline were very small. In the second half, we will see the trend of the US economy.

Although there are big differences in the current economic situation, there is a surprising coincidence in macroeconomic policy expectations: interest rates may rise by 1~2 times, and the reserve requirement rate is not up to much.

Policy expectation: there is limited space to raise interest rates and raise rates.

Xie Guozhong said that the growth of money supply will be controlled at 16%, and the goal of eliminating negative interest rates will not change. It will continue to raise interest rates in the second half of the year, and it will increase interest rates by 2~3 times in the second half. In addition, if the external reserve rises too fast and the money supply rises, the deposit reserve rate will continue to rise, otherwise, the room for raising the reserve will be limited.

Cao Yuanzheng believes that monetary policy will maintain a neutral or even tight direction. Because the real interest rate is negative, it is estimated that there will be 1~2 interest rate hikes, and the deposit reserve ratio will not be adjusted again.

Wang Zhihao expects the interest rate cycle to come to an end, and it is estimated that there will be another interest rate increase. The deposit reserve ratio will not be added in the short term. In the second half of the year, if CPI falls, and economic growth will remain above 9%, the macroeconomic policy will remain relatively stable, which is good for the stock market.

Ren Ren believes that the current tightening is in place. We should attach importance to the risk of economic slowdown next year. However, the adjustment of the direction must go through a series of decision-making procedures, which will eventually lag behind. It is estimated that the government will not be able to make policy adjustments before it sees prices go down or the economy declines.