QuickScan: Politburo Update December 2023

Last Friday, the Politburo gathered for its final economic session this year. We compare the messages of the meeting to previous ones to identify potential policy shifts. Overall, the meeting surprised somewhat to the downside. Our latest QuickScan has more.

The Politburo fine-tuned its language on monetary policy to focus more on effective and flexible monetary support compared with its previous emphasis on strong support. This in line with recent calls by the PBoC for a more effective use of existing loans and for credit growth to be smoothed out across the year to reduce volatility (see DeepDive: Key Messages from the PBoC’s Monetary Policy Outlook and QuickScan: Taking Stock of Money Supply Developments). It also suggests that monetary policy support may slow somewhat next year.