Chinese leaders have decided to raise the budget deficit to 4% of GDP next year, the highest on record, while keeping a 5% economic growth target.

China’s new budget deficit target for 2024 is 4% of GDP, up from the initial 3%, as part of a “more proactive” fiscal policy.

The additional deficit will amount to about 1.3 trillion yuan ($179.4 billion), funded through off-budget special bonds.

These targets are typically not officially announced until the annual parliament meeting in March and may change before then.

The stronger fiscal plan is aimed at preparing for the potential impact of increased US tariffs if Donald Trump returns to the White House.

China plans to keep its GDP growth target at around 5% for 2025.

Morgan Stanley expects a modest increase in off-budget bond quotas, leading to around 2 trillion yuan in fiscal expansion.

The 5% GDP target is seen as a way to guide expectations and boost confidence rather than a strict goal for aggressive stimulus.

Unlock profitable opportunities every day! Unicorn Signals provides actionable intraday trading signals for stocks and futures. Don’t miss out – download Unicorn Signals and start winning now!