BEIJING (Reuters) – China will aim to achieve “a good start” in the first quarter for the economy, the state planner said on Tuesday, signalling authorities could roll out more stimulus measures in the near term to counter slowing growth.

China will strengthen monitoring of its economic situation and improve its “reserve” of economic policies, the National Development and Reform Commission (NDRC) said in a statement.

The world’s second-biggest economy slowed in 2018 as Chinese authorities carried out painful long-term structural adjustments to transition to a more gradual but sustainable growth trajectory.

A trade war with the United States has also heaped uncertainty on China’s near-term outlook. Exports unexpectedly fell the most in two years in December in a sign of mounting pressure on the economy.

Premier Li Keqiang said China achieved its key 2018 economic targets, which were “hard-worn”, and seeks a strong start to the economy in the first quarter to establish conditions helpful to meeting this year’s goals, according to state television on Monday.

Sources told Reuters last week that Beijing was planning to lower its growth target to 6-6.5 percent this year after an expected 6.6 percent in 2018, the slowest pace in 28 years.

The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, the sources told Reuters.

Annual growth of about 6.2 percent is needed this year and in 2020 to meet the ruling Communist Party’s longstanding goal of doubling gross domestic product and incomes in the decade to 2020, and to turn China into a “modestly prosperous” nation.

China has lowered the level of reserves that commercial banks need to set aside for the fifth time in a year, to spur lending, particularly to small and medium-sized firms. Beijing has also cut taxes and fees, and stepped up infrastructure investment to shore up the economy.

This year, China will step up fiscal expenditure and implement larger tax and fee cuts. The cuts will focus on reducing burdens for small firms and manufacturers, the finance ministry said in a statement on Tuesday.

Stabilising employment is the government’s top priority, NDRC Vice Chairman Lian Weiliang said at a press conference on Tuesday.

NO FLOOD OF STIMULUS

China will speed up investment projects and local government bond issuances, but will not resort to “flood-like” stimulus, Lian said.

The central bank, in a separate statement, said it will maintain prudent monetary policy, keeping it neither too tight nor too loose, and strengthen the counter-cyclical adjustments.

Monetary policy will be made more forward-looking, flexible and targeted, the People’s Bank of China (PBOC) said.

A prudent monetary policy does not mean that there will be no changes, PBOC Deputy Governor Zhu Hexin said at the press conference.

When asked if the PBOC should cut benchmark interest rates, Zhu said existing monetary policy measures should be improved.

A few analysts believe interest rate cuts are a possibility, but most expect Beijing will refrain from massive stimulus measures like those deployed in the past, due to worries that it could add to a mountain of debt and weaken the yuan.

“Both fiscal and monetary policy have been loosened over the past few months and this should start to feed through to the real economy by the second half of this year,” analysts at Capital Economics said in a note.

“However, the scale of the stimulus so far has been more limited than in 2015-16, and the effect on activity is likely to be correspondingly smaller.”

Chinese banks extended 16.17 trillion yuan ($2.40 trillion) in net new yuan loans last year, the PBOC said in its statement, blowing past the previous record of 13.53 trillion yuan in 2017.

Outstanding yuan loans were up 13.5 percent at the end of 2018 from a year earlier, according to the central bank.

($1 = 6.7507 Chinese yuan renminbi)