China’s tax plan to boost GDP estimates - UOB

Analysts at United Overseas Bank (UOB) expressed their take on China’s tax plan to spur the country’s economic growth.

Key Quotes:

“It is likely that further tax measures are in the pipeline.

The plan allows new deductions for mortgage interest, rent, children and personal education, medical expenses and parental support.

GDP forecast for 2019 remains 6.3% (in line with the consensus) but could come under review.

In line with the PBOC's support for maintaining ample market liquidity, we also reiterate our call for a possible fifth reserve requirement ratio (RRR) reduction either end-2018 after the US Fed FOMC's final rate hike for the year or early 2019 ahead of the Spring Festival when there is seasonally strong liquidity demand."