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CHINA PRESS: PBOC Should Keep 3% Inflation Target

CHINA PRESS
EM BulletAPACChinaEmerging Market NewsBulletMarketsFixed Income BulletsForeign Exchange Bullets

The People’s Bank of China should retain its 3% inflation target and resist calls for 2% given the nation remains a developing country with a per capita GDP of around USD10,000, making a lower goal less conducive to economic vitality, according to Li Yongning, associate professor at the School of Economics of Tianjin Polytechnic University. China's shift from a prudent to a moderately loose monetary policy in 2025 would contradict an inflation target cut and send mixed signals to the market, Li noted. Instead, authorities should extend the 3% aim from an annual to longer duration timespan, such as over a government term or economic cycle, Li added.

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The People’s Bank of China should retain its 3% inflation target and resist calls for 2% given the nation remains a developing country with a per capita GDP of around USD10,000, making a lower goal less conducive to economic vitality, according to Li Yongning, associate professor at the School of Economics of Tianjin Polytechnic University. China's shift from a prudent to a moderately loose monetary policy in 2025 would contradict an inflation target cut and send mixed signals to the market, Li noted. Instead, authorities should extend the 3% aim from an annual to longer duration timespan, such as over a government term or economic cycle, Li added.