Eases as Economy Could Use a Boost
With no risks seen from rising prices, the door is open for policy easing to help growth
China’s factory-gate inflation eased and consumer price growth slowed, giving Beijing room to stimulate growth at a time when more major economies are looking to tighten policy to curb rising prices.
Analysts expect China’s producer-price index to continue to pull back in the coming months, as rising energy costs are likely to be offset by a higher year-over-year point of comparison from 2021.
Economists forecast that China’s PPI inflation could hit 8.2% in the first quarter, before falling to 5.1%, 2.9% and 0.5% in the remaining quarters for 2022.
The People’s Bank of China last month lowered two key interest rates, after cutting the amount of cash that banks must hold in reserve twice since last summer.
The bank expects another cut in benchmark lending rates by June.
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