The recently released "China Monetary Policy Implementation Report for the Fourth Quarter of 2021" shows that, according to preliminary estimates, my country's macro leverage ratio is 272.5% by the end of 2021, 7.7 percentage points lower than the end of the previous year, and has declined for five consecutive quarters. Significant results have been achieved in stabilizing leverage. .
Macro leverage refers to the ratio of the debt balance of the non-financial corporate sector, the government sector, and the household sector to the annual gross domestic product.
In a sense, high leverage is a source of macro-financial vulnerability.
Therefore, maintaining a basically stable macro leverage ratio and properly handling the relationship between economic development and risk prevention are of great significance to maintaining financial stability and maintaining the bottom line of no systemic financial risks.
In 2020, due to the impact of the new crown pneumonia epidemic, my country's nominal GDP growth rate has slowed down, and macro policy hedging has increased, resulting in a phased increase in leverage ratio.
However, from the fourth quarter of the year to each quarter of 2021, the macro leverage ratio has decreased month-on-month, achieving a relatively large deleveraging.
For more than a year, my country's macro leverage ratio has continued to stabilize with some declines, mainly due to effective epidemic prevention and control, steady economic recovery, and effective macro policies.
On the one hand, the epidemic prevention and control has achieved remarkable results, and the continuous recovery of the national economy is the key to stabilizing the macro leverage ratio.
Nominal GDP is the denominator for calculating the macro leverage ratio, and its growth rate has an important impact on the change in leverage ratio.
In 2020, my country took the lead in controlling the epidemic, resuming work and production, and achieving positive economic growth. The resilience of economic development has been continuously enhanced, which has played a decisive role in stabilizing the macro leverage ratio.
On the other hand, the macro policies are strong, measured and effective, and the economic fundamentals have been stabilized with a controllable increase in debt.
After the outbreak of the epidemic, a prudent monetary policy has become more flexible, appropriate, precise and oriented, and the response is timely and powerful.
In 2020, my country launched a total of more than 9 trillion yuan of monetary support measures to guide the financial system to give 1.5 trillion yuan of profits to the real economy, and the real sector has a significantly stronger sense of gain.
At the same time, fiscal policy has become more active and promising, and large-scale relief measures have been introduced to hedge against the impact of the epidemic.
On the whole, macroeconomic policies have been properly coordinated, and a joint effort has been formed to do a good job of "six stability" and "six guarantees", stabilizing the economic market.
Not only that, monetary policy adheres to a prudent orientation and does not engage in "flooding".
After May 2020, my country's monetary policy has gradually turned to normal, and since 2021, it has maintained forward-looking, continuous and stable, and strengthened cross-cycle adjustment to continue to escort the steady recovery of the economy.
From the two-year average, the growth rates of broad money and social financing in 2020 and 2021 are 9.5% and 11.8%, respectively, which basically match and are slightly higher than the average nominal economic growth in the same two years.
Thanks to this, the debt growth of my country's non-financial sector is relatively restrained and controllable. In 2021, the total debt balance will increase by 9.7% year-on-year, 2.7 percentage points lower than the growth rate at the end of the previous year, which is at a historically low level, which is higher than the total debt from 2009 to 2019. Debt growth averaged 7.3 percentage points lower.
The macro leverage ratio has been stable with some decline, creating space for the financial system to continue to increase support for the real economy in the future.
At the same time, my country's epidemic prevention and control situation is good, and the resilience of economic growth has been continuously enhanced, which has also created conditions for maintaining a basically stable macro leverage ratio in the future.
In the next stage, the prudent monetary policy will continue to be flexible and appropriate, increase cross-cycle adjustment, enhance the stability of the growth of total credit, and maintain the growth rate of money supply and social financing scale to basically match the growth rate of the nominal economy.
In fact, this "matching" mechanism itself has the meaning of keeping the macro leverage ratio basically stable.
With the further recovery and development of the economy and the growing momentum of endogenous growth, my country's macro leverage ratio will continue to remain basically stable.
(Source of this article: Economic Daily Author: Jin Guanping)