What you need to know about China's macro targets for 2013

7.5% GDP target has been penciled in.

According to BBVA Research, today’s start of the 12-day National People's Congress began with the release of official 2013 macro targets, contained in outgoing Premier Wen Jiabao's Government Work Report.

Among the key targets are GDP growth (7.5%), average inflation (3.5%), M2 growth (13.0%), and the fiscal deficit (2.0% of GDP). 

Here's more:

The targets are broadly in line with our and market expectations, as described in our recent quarterly China Outlook. Of special significance is that the growth target is unchanged from last year, while the inflation and M2 targets have been lowered (from 4.0% and 14.0%, respectively).

The inflation target is ambitious – our 2013 projection for average inflation is 3.3%, with monthly inflation expected to rise to 4.0% or above by end-year – and may reflect an effort to guide down inflation expectations.

Taken together, the targets signal the new leadership’s intention to maintain policy continuity with respect to a mix of “proactive fiscal policy and prudential monetary policy”.

As expected, the longer-term sections of the report underscored the government’s emphasis on the quality of growth, urbanization, and economic rebalancing through a deepening of reforms.