The Country's Macro Economy Is Improving But There Are Still Challenges

Due to the impact of the epidemic, the International Monetary Fund (IMF) has lowered its 2020 global GDP growth forecast by 6.3 percentage points from -3.3% in January to -3%, the worst economic recession since the "Great Depression" in the 1930s.

On the whole, the fundamentals of my country's economic stability and improvement, long-term improvement and high-quality development have not changed. In accordance with the decision and deployment of the Party Central Committee and the State Council, various regions and departments took multiple measures to comprehensively promote the resumption of production and production in the normalization of epidemic prevention and control, and restore normal economic and social order.

According to the report, at the end of the first quarter, my country's industrial enterprises above designated size were close to full-scale resumption, and catering, hotel, and other enterprises across the country also resumed business, and transportation and logistics further resumed. Economic data has improved since March. But also need to pay attention to the following risks:

First, the duration and negative impact of the global epidemic may exceed expectations. The epidemic situation in developed countries in Europe and America is still serious, and the effect of efforts to restart the economy needs to be observed.

Second, the effects and spillover effects of highly accommodating unconventional monetary and fiscal policies in major economies need to be closely monitored. Monetary and fiscal policies can only hedge against the negative impact of the epidemic. The future global economic recovery and financial situation will still depend on the progress of epidemic prevention and control. The negative effects of unconventional policies will gradually emerge.

Third, the domestic economy still faces many challenges. Enterprises, especially small and medium-sized enterprises, are greatly affected by the epidemic. The pressure on residents’ employment and social security is rising. The coordination of the industrial chain to resume work and production needs to be strengthened.

Fourth, there are also uncertainties in my country's balance of payments and cross-border capital flows. On the one hand, the central bank of major economies has greatly loosened monetary policy, coupled with my country's leading epidemic prevention and control and resumption of production and production, leading to higher returns of RMB assets and relative security may attract cross-border capital inflows. On the other hand, the continued weakening of external demand and the decline in investor risk appetite may also cause a decrease in exports and cross-border capital outflows.