More aggressive China stimulus unlikely for now, BofA says

China's central bank and government continued their stimulus measures on Wednesday, but BofA Global Research economists predict more aggressive action will wait. The latest policy package, announced on Tuesday, provided targeted support for investment and the property market, but BofA said it lacked the comprehensive nature of previous measures.

Key components, such as China's new national mortgage subsidy, had narrow eligibility criteria, qualifying only a fraction of the annual home transactions. The maximum fiscal cost of the subsidy was estimated at around 27 billion yuan, indicating limited direct support. However, the economists believe the subsidy could have a larger impact through sentiment, lowering borrowing costs for eligible buyers.

Meanwhile, the People's Bank of China implemented further easing measures, including a reduction in the one-year pledged supplementary lending rate and expanded eligibility for various infrastructure projects. These actions suggest policymakers are taking steps to stabilize growth while maintaining comfortable aggregate demand levels, buoyed by strong exports.