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Economic Research
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11
May 2017
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China
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Economic Update
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China’s
CPI was lifted by the narrowing moderation of food prices and growing
non-food inflation in Apr 2017, while PPI dropped at a faster-than expect
pace. Looking ahead, we believe that the CPI would move towards 2% YoY level
in the coming months amid a rebound of food prices and more upside risks from
non-food sectors. Meanwhile, PPI would continuously decline towards par level
in the next couple of quarters given easing commodity prices, a high base
effect and start of the destocking process in 3Q17. Policy-wise, we expect to
see more regulatory storms on shadow banking and off-balance sheet assets,
which are likely to result in tighter liquidity conditions and rising
borrowing costs for both financial institutions and corporates.
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Thursday, May 11, 2017
Producer Prices To Further Moderate
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