China: Inflation surprised to the downside in January- UOB
|Economist at UOB Group Ho Woei Chen, CFA, assesses the latest release of inflation figures in the Chinese economy.
Key Takeaways
“China’s CPI and PPI continued to moderate and were both below expectations in Jan.”
“We maintain our forecast for 2022 CPI to average 2.2% compared to 0.9% in 2021 as it is expected to rebound in the coming months on the back of the low comparison base last year as well as elevated energy prices. Consumption demand recovery may still be constrained by a weaker economic outlook and COVID-19 containment measures, at least in the first half of the year.”
“We expect PPI to moderate towards 4-6% in 2022 from 8.1% in 2021 but elevated energy prices and the supply chain disruption remain key concerns.”
“The PBOC maintained its rhetoric on a prudent monetary policy that should be flexible and appropriate and to strengthen cross-cyclical adjustment. We expect the PBOC to guide the LPR lower in the coming MLF settings and maintain our call for the benchmark 1Y LPR to fall by another 15 bps to 3.55% by the end of 2Q22.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.