Bank of America Securities anticipates that China will lower its official 2026 economic growth target into a 4.5%–5.0% range, while retaining a broadly supportive policy stance. The targets are expected to be disclosed when the National People’s Congress (NPC) opens on March 5, alongside announcements on fiscal policy, monetary settings and a draft outline of the 15th Five-Year Plan.
BofA economists say a mildly reduced headline goal would be consistent with ongoing weakness in domestic demand and a set of persistent structural constraints. They highlight stress in the property sector, demographic pressures and strains on local government finances as key headwinds weighing on growth. At the subnational level, 17 of China’s 31 provinces have already lowered their 2026 growth targets, a signal of greater caution among local authorities.
Even with a softer growth objective, policymakers are expected to maintain policy support. Authorities have previously reaffirmed a "moderately loose" stance for monetary policy and a "more proactive" fiscal approach. On the monetary front, BofA continues to expect roughly 20 basis points of policy rate cuts this year, complemented by targeted lending instruments aimed at priority sectors.
Fiscal policy is likely to remain accommodative as well. The bank projects the fiscal deficit will stay around 4% of GDP, with elevated issuance of special treasury bonds and local government special-purpose bonds to direct financing toward infrastructure and strategic initiatives.
Reviving domestic demand is identified as the central policy challenge. Fixed-asset investment contracted in 2025 for the first time in more than three decades, and consumption momentum has weakened as the effects of earlier subsidies diminished. Market participants will be watching for signs that consumer subsidies are being expanded or that infrastructure outlays are being ramped up.
The draft 15th Five-Year Plan is expected to draw close attention for its long-term priorities, which BofA notes include scaling adoption of artificial intelligence, raising the consumption share of GDP and managing risks related to local-government and property-sector debt. The bank emphasizes that the clarity and enforceability of these long-term targets will be important in shaping investor expectations for China’s next policy cycle.
Context and implications
- Disclosure of the new growth target, fiscal direction and the five-year roadmap at the NPC on March 5 will provide the official framework for 2026 economic policy.
- Policy measures expected by BofA include modest rate relief, targeted lending to priority sectors, and greater use of special bonds to finance infrastructure and strategic projects.
- Investor focus is likely to centre on whether consumer-support measures are expanded and whether infrastructure spending accelerates to offset weak private demand.