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MNI BREIF: China To See H2 CPI Pick Up On Consumption - PBOC

MNI (Singapore)
(MNI) Beijing

China's consumer prices are likely rise in the second half of the year, as consumption picks up on the back of financial support, with little sign of deflation risk, said Zou Lan, head of the Monetary Policy Department of the People’s Bank of China on Thursday.

Speaking at the PBOC's Q1 press conference, Zou said monetary policy has been focusing on supply side and it would take time to transmit the support to the demand side which was hit hard by the pandemic. That has seen the supply side recover faster than the demand side, when he explained the divergence between a strong credit performance and a weak CPI which has triggered some debate about deflation risk.

China CPI will see a U-shaped trend this year, and the central bank will continue to support steady price of grain and energy, while watching for labour market impacts and spillover effects of overseas high inflation, he added.

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