Low CPI Expected Over May, June - PBOC

China’s CPI will remain low in May and June due to the high-base effects of last year, according to the recently released People’s Bank of China’s Q1 policy report. However, the economy will record faster consumer price increases later in the year, when policy measures take effect and the gap between supply and demand closes, the central bank said. The report also noted China should maintain a prudent monetary policy to avoid high inflation and banking instability experienced by developed countries. The PBOC said the economy does not face deflation risk, as M2, social financing and growth are expanding. Authorities will prioritise supervising the SME banking sector to mitigate risks, the report said. (Source: 21st Century Herald)