(Yicai) July 16 -- China is expected to strengthen its policies to balance economic growth in the second half to achieve its target of around 5 percent growth this year, chief economists said after the third plenum started.

There will be room for monetary policies such as cutting interest rates and the reserve requirement ratio, Wang Qing, chief macro analyst at Golden Credit Rating International, said to Yicai on the sidelines of the third plenary session of the 20th Central Committee of the Communist Party of China, a strategic meeting held roughly every five years.

Moreover, China's fiscal policy will speed up public spending to reverse the narrowing growth of infrastructure investment, Wang predicted.

After the central bank eased its mortgage policies in May, the second half is expected to see more supportive policies targeting the real estate sector, and the focus is on lowering residents' mortgage rates, according to the chief economist.

China's economic growth in the third quarter could be around 4.9 percent and the number for the second half could tally about 5 percent, enabling the full-year target, per Wang.

In the first six months of this year, China’s gross domestic product rose 5 percent from a year ago, consistent with a target set in a government work report, according to data disclosed by the stats bureau yesterday. More specifically, the gauge of productivity grew 5.3 percent in the first quarter and 4.7 percent in the following three months.

The shrinking growth in the quarter ended June lays bare insufficient domestic demand in contrast to the continuously strong external demand, caused by the prolonged sluggishness of the real estate sector, weak consumption, and soft private investment, all of which are issues to be resolved, Wang pointed out.

In the second half, there will still be huge room for fiscal policy maneuvering as such moves were limited during the better-than-expected first half, said Wen Bin, chief economist at China Minsheng Bank. The issuance of general and special government bonds merely reached 46 percent and 38 percent of the 2024 quotas, respectively, and both figures are much lower than average in the past five years, Wen added.

In the second half, China's fiscal budget still has room to use up CNY6 trillion (USD825.9 billion), including CNY2.9 trillion of fiscal deficit, CNY2.4 trillion of new special bonds, as well as CNY750 billion (USD103.2 billion) of ultra-long special treasury bonds, Wen noted.

Consequently, the nation is likely to further boost its fiscal policies to stimulate domestic demand. For instance, it is expected to issue more favorable policies regarding fees and taxes and add a quota of around CNY1 trillion to issue special refinancing bonds, Wen concluded.

Editors: Dou Shicong, Emmi Laine