(Bloomberg) -- Economists pushed back their expectations of another cut in China’s reserve requirement ratio to next quarter, with the government so far stopping short of giving a clear signal of a near-term policy move. 

Only nine of the 21 economists surveyed by Bloomberg expect a cut in the ratio -- or the amount of cash banks have to hold in reserve -- to happen in March. In the previous survey in February, 15 out of the 20 analysts had predicted a reduction by the end of this month.

Analysts continue to expect the People’s Bank of China to lower the key policy interest rate on its one-year medium-term lending facility by 10 basis points in the second quarter. They forecast a reduction in the de facto benchmark lending rate, the one-year loan prime rate, by the same magnitude in the period. 

“Given the momentum in China’s economy slowed at year end, we felt additional stimulus was not required immediately,” said Elliot Clarke, a senior economist at Westpac Banking Corp. Stimulus will “provide a better return if delivered slowly through 2022,” he said.

Analysts started to anticipate another cut in the RRR after a top financial committee met last week and made a strong pledge to boost market confidence. However, the government hasn’t followed up with any specific steps yet, and a State Council meeting on Monday chaired by Premier Li Keqiang didn’t provide a signal on any monetary policy tool that could be used. 

The Bloomberg survey of economists was conducted after the financial committee’s meeting last week but before the State Council’s one this week. 

The PBOC shifted to an easing bias late last year to support a weakening economy. It guided credit growth higher and delivered a cut in policy interest rates in January. However, the growth outlook has continued to worsen in the wake of the biggest Covid outbreak since the initial cases in Wuhan and financial market turmoil following Russia’s invasion of Ukraine.

The Financial Stability and Development Committee, chaired by Vice Premier Liu He, said last week that monetary policy will be more proactive to shore up growth.

The loan prime rates could also be lowered in the second quarter after they were left unchanged on Monday, the China Securities Journal -- managed by the official Xinhua News Agency -- said in a report Tuesday, citing analysts including Wang Yifeng at Everbright Securities. 

“We expect Beijing to continue with piecemeal easing of monetary and fiscal policy, as well as a cautious relaxation of macroprudential standards including for real estate,” said Arjen van Dijkhuizen, senior economist at ABN Amro NV. 

The latest Bloomberg survey also shows a cut in economists’ growth projections for this year to 5% from 5.1% in the February poll. That’s lower than the official growth target of about 5.5%. 

A new wave of Covid-19 infections have led to regional lockdowns, while a persistent slump in the housing market continues to weigh on economic activity. Weakness in consumption and an expected slowdown in exports later this year all constitute a challenge to the authorities’ growth goal.

“Should restrictions intensify or persist for a prolonged period of time, China’s economy could grow below 5% this year,” said Brendan McKenna, an international economist at Wells Fargo.

Other highlights of the survey:

  • The economy will likely expand 5.2% in 2023 and 5% in 2024, the same pace as in the previous survey
  • Factory inflation is set to average 4.9% this year, near a full percentage higher than the previous estimate
  • Forecasts for fixed-asset investment growth were upgraded to 5.3% in 2022
  • Retail sales will probably come in at 6% growth in 2022, 50 basis points lower than the previous estimate

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