The head of China’s central bank said today that the economy still faces many challenges, and warned that authorities would not resort to huge stimulus measures but instead exercise moderation.

The country’s recovery from the aftermath of COVID-19 has reduced in the months since it abruptly lifted tough restrictions in 2022, with a property crisis and tepid consumer demand weighing on growth.

Central bank chief Pan Gongsheng told a financial forum in Shanghai that the economy was struggling with insufficient effective demand, insufficiently smooth domestic circulation, and a marked rise in the complexity, severity and uncertainty of the external environment.

However, he said authorities would avoid major easing or tightening and that protecting price stability and promoting the moderate recovery of prices will be important considerations, while they use interest rates, reserve requirement ratios and other policy tools flexibly.

China last year recorded one of its worst annual growth rates since 1990, though the first three months of 2024 outstripped expectations. And the International Monetary Fund recently upgraded its outlook for this year in light of the promise of more support measures.