Core view: this round of epidemic has brought great impact to the economy. If the epidemic continues until June, it will have a greater impact on the economic growth in the second quarter and the whole year. However, the national Standing Committee stressed that "we should not relax our efforts to set targets and put steady growth in a more prominent position". From the demand side, the key to steady growth lies in infrastructure, real estate investment and consumption. Infrastructure is the main support for economic growth, while consumption and real estate are the main drag.
How to rebound the economy after the epidemic: after the epidemic in 2020, infrastructure and real estate investment recovered the fastest, followed by exports, manufacturing investment and consumption recovered slowly, and the policy pulling effect was not obvious. However, real estate in 2022 is in a downward cycle, and the slow recovery of consumption after the epidemic will become a major drag on the economy; We need to rely on infrastructure related policies.
Three keys to steady growth: infrastructure, real estate and consumption. (1) Infrastructure development is the most important support for economic growth this year. We believe that the growth rate of infrastructure can reach about 5-7% this year. The project side focuses on five aspects: transportation, water conservancy, new infrastructure, major projects in the 14th five year plan and urban renewal. (2) Real estate investment should achieve a positive growth of 1-2%. Second tier cities are the key, demand is supported, policy relaxation can be effective, and the recovery of first and second tier cities can also drive the positive growth of real estate investment in the whole year. (3) It is expected that under the most optimistic situation, the annual social zero growth rate will be 5.7%. Consumption policies should be strengthened in two aspects: one is to increase the scale and accuracy of consumption subsidies, and the other is to promote employment restoration.
Tax reduction and fee reduction: (1) tax reduction and fee reduction can stimulate economic growth. In 2019, tax reduction and fee reduction will drive GDP growth by 0.8 points, fixed investment growth by 0.5 points and social development by 0.1 points. (2) However, the effect of tax reduction and fee reduction policy this year will be weaker than that in 2019. 60% of this year's 2.5 trillion tax cuts and fees are reserved for tax rebates, which improve enterprise cash flow without increasing enterprise income. In 2019, the value-added tax rate will be reduced and the individual income tax threshold will be raised, which will directly increase the income of enterprises and individuals.
Risk tip: the impact of the epidemic on GDP exceeded expectations; The strength of macro policies exceeded expectations; The epidemic situation has changed greatly.
