China Watch Blog has learnt that China’s inflation may weaken in April, allowing more room for policy stimulus, but trade is likely to remain dim.
The Consumer Price Index, a main gauge of inflation, may rise 3.4 percent in April, Lu Zhengwei, chief economist at the Industrial Bank, said.
The Bank of Communications economist Tang Jianwei predicted a 3.3 percent increase, the Shanghai Daily reported.
The inflation rebounded more than expected to 3.6 percent in March from the 20-month low of 3.2 percent in February.
“Inflationary pressure is receding with lower global oil prices and cheaper pork,” Lu said. “This can ease worries of policymakers and allow a reserve requirement ratio cut possibly this month.”
The world’s second-largest economy still needs at least one reserve requirement ratio cut to boost liquidity and sustain growth, which showed some encouraging signs this month, analysts said.
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