- Analytics
- News and Tools
- Market News
- China: Lower inflation could support further PBoC easing – UOB
China: Lower inflation could support further PBoC easing – UOB
Economist at UOB Group Ho Woei Chen, CFA, assesses the latest inflation figures in China.
Key Takeaways
“Headline inflation unexpectedly eased from its 2-year high as it fell to 2.5% y/y in Aug (Bloomberg est: 2.8% y/y, Jul: 2.7%) with food and non-food prices moderating. Core inflation (excluding food & energy) was unchanged from Jul at 0.8% y/y as domestic demand stayed weak amid expanding COVID lockdowns across cities.”
“Producer Price Index (PPI) dropped sharply to 2.3% y/y in Aug (Bloomberg est: 3.2% y/y, Jul: 4.2%). Weaker PPI was attributed to lower international oil and commodity prices as well as weak market demand in some domestic industries.”
“With CPI averaging just 1.9% y/y in Jan-Aug, we now expect full-year inflation at 2.2% instead of our earlier forecast of 2.5% (2021: 0.9%). We also lower our PPI forecast to average 4%-5% in 2022 compared to our earlier estimate of 5%-6% (2021: +8.1%).”
“We continue to see scope for further monetary policy easing, with the 1Y LPR to move lower to 3.55% by end-4Q22 (from current 3.65%). After 35 bps cut YTD, the 5Y rate is still poised to fall further (from current 4.30%) as PBoC extends support to the property market.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
