What to make of the growth target

The GDP growth target for 2023 will be revealed on Sunday at the opening of the National People’s Congress. There is speculation that it could be raised relative to last year but we think that’s unlikely. The leadership tend to be cautious when setting the growth target. Keeping it unchanged would be enough to signal that they are unusually confident. In any case, the growth target often isn’t the best guide to policymakers’ expectations – a better gauge is the implicit nominal GDP assumption embedded in the government’s budget deficit projections.