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J.P. Morgan Expect China Policy Rates To Remain Unchanged

CHINA DATA

JPM sees China policy rates on hold in 2023, below the bank gives it views post yesterday's China inflation data.

  • J.P. Morgan: "The April inflation prints highlight that general pricing power remains soft despite ongoing post-COVID rebound in economic activity. Looking ahead, sustained growth recovery, broad-based improvement in labor market conditions and households’ income and employment expectations will be needed to support pricing power for general goods and services. We expect CPI inflation to remain subdued in the near term, likely staying below the 1%-handle at least through 3Q. We look for headline CPI inflation to average at 0.8%y/y for 2023. On monetary policy, we expect the PBOC to keep policy rates unchanged for the rest of the year. Besides, we expect credit policy to be relatively stable going forward, with our forecast of TSF growth at 9.8% in 2023.

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