(Yicai) Feb. 7 -- China will set its economic growth target for this year at 5 percent next month, according to the average prediction of chief economists polled by Yicai.

At the Two Sessions, China's annual policy-setting meeting, the National People's Congress and the Chinese People's Political Consultative Conference will set the country's gross domestic product growth target at around 5 percent, as the economy is expected to continue to recover this year, the survey of 17 leading economists in China revealed.

China's GDP grew 5.2 percent last year, above the government's target of "around 5 percent," the National Bureau of Statistics announced on Jan. 17.

This year's economic growth will remain at about the same level as last year, but there will be a significant improvement in terms of microeconomics perspectives, said Chen Xing, chief macro analyst at Caitong Securities.

The economists also predicted that China's consumer price index, a main gauge of inflation, will likely widen nearly 2.4 percent this year from last year. However, they expect the figure to have fallen 0.45 percent in January from a year earlier, down 0.15 percentage point from December.

The producer price index, a measure of industrial profits, likely fell 2.42 percent last month from a year earlier, recovering from a decline of 2.7 percent in December, according to the economists.

The Yicai Chief Economists Confidence Index fell to 50.05 this month from 50.89 in January but remained above the halfway mark of 50, indicating positive sentiment.

New yuan loans likely soared to CNY4.4 trillion (USD619.1 billion) in January from CNY1.17 trillion the previous month, the chief economists predicted. Their average forecast for social financing was CNY5.83 trillion last month.

M2, a broad measure of money supply that covers cash in circulation and all deposits, likely grew 9.48 percent in January from a year earlier, according to the economists.

The accelerated issuance of government bonds will remain the main factor driving social financing in the first quarter of the year, so the 10-year government bond yield will likely experience a short-term rebound, said Zhang Jun, chief economist at China Galaxy Securities. However, social financing and the M2 growth rate will only accelerate after the real estate, construction, and manufacturing sectors begin to rebound, Zhang added.

The People's Bank of China will trim the reserve requirement ratio for financial institutions for the first time this year by 50 basis points from Feb. 5, Governor Pan Gongsheng announced at a press conference on Jan. 24. In the past two years, each RRR cut was 25 bps.

The economists polled by Yicai expect that the RRR for large financial institutions will not be further lowered in February, but it may be cut again later this year.

The exchange rate between the Chinese yuan and the US dollar was 7.1039 on Jan. 31 and will likely remain stable this month. The economists predicted the figure to be around 7.1 at the end of February and reach 6.93 by the end of the year.

Editor: Futura Costaglione