四季度宏观经济形势展望：畅通内循环，重塑信心再起航

Economic Overview - China's GDP growth rate has shown resilience but has declined to below 5% in Q2 2024, with expectations to maintain a target of "around 5%" for the year[2] - The three main drivers of the economy—consumption, investment, and exports—are weakening, with year-on-year growth rates of 3.70%, 3.40%, and 3.40% respectively as of August 2024[2] Inflation and Deflation Concerns - The Producer Price Index (PPI) has been negative since 2023, with a cumulative year-on-year growth rate of -2% as of September 2024, indicating deflationary pressures[3] - The GDP deflator index has been negative for five consecutive quarters, with a decline of 0.89 percentage points in Q2 2024[3] Internal Economic Challenges - The internal circulation is hindered by insufficient funds, as evidenced by the negative growth differential between M1 and M2, which reached -13.60% by July 2024[22] - Local government spending has decreased significantly, with growth rates dropping to as low as 0.3% in late 2021, reflecting fiscal pressures[13] Real Estate Market Impact - The real estate market remains a critical area affecting internal circulation, with all key indicators showing negative year-on-year growth since August 2021[18] - The government's fiscal policies are increasingly focused on stabilizing the real estate market to alleviate pressures on local governments and boost overall economic activity[27] Policy Responses and Future Outlook - The U.S. Federal Reserve's shift to a rate-cutting cycle has opened up policy space for China, allowing for potential easing measures[26] - The government plans to significantly increase fiscal leverage, with a projected fiscal deficit of 4.06 trillion yuan for 2024, up by 180 billion yuan from the previous year[27] Structural Economic Changes - The contribution of the "three new economies" (new industries, new business formats, and new models) to GDP has increased to 17.73% as of 2023, indicating a shift towards more innovative sectors[24] - High-tech manufacturing and equipment manufacturing sectors are showing strong performance, with PMI readings above 50, suggesting expansion[24]