BEIJING, March 5 ― China today targeted slower economic growth of around 5.5 per cent this year as domestic headwinds, including a downturn in the country's vast real estate sector and lacklustre consumption, cast a pall on the outlook for the world's second-largest economy.

Gross domestic product grew 8.1 per cent last year, its best showing in a decade and beating the government's target of over 6 per cent, helped by robust exports to economies hit by Covid-19 and due to a low statistical base in 2020, when the pandemic began to spread worldwide.

Yet, as economic conditions began to soften, the central bank has started cutting interest rates, local governments have expedited infrastructure spending and the finance ministry has pledged more tax cuts.

"A comprehensive analysis of evolving dynamics at home and abroad indicates that this year our country will encounter many more risks and challenges, and we must keep pushing to overcome them,” said Premier Li Keqiang at the start of China's annual meeting of parliament at the Great Hall of the People.

"In our work this year, we must make economic stability our top priority and pursue progress while ensuring stability.”

Weighing on the economy is a property downturn triggered by a government campaign to control borrowing among highly indebted developers. An ensuing tightening in liquidity squeezed the sector and chilled buyer sentiment.

Sporadic Covid outbreaks last year across China and the arrival of the Delta and Omicron variants further erected roadblocks to growth, as tough anti-coronavirus measures hit the industrial and hospitality sectors.

China set its 2022 budget deficit target at around 2.8 per cent of gross domestic product, Li said, compared with last year's target of around 3.2 per cent of GDP.

The consumer price index target was unchanged at around 3 per cent.

The quota for local government special bond issuance was set at 3.65 trillion yuan (RM2.41 trillion), also unchanged from 2021. ― Reuters