China sees rebound in May’s inflation
Print Edition
CHINA’S inflation may rebound to between 2.3 and 2.6 percent in May while trade is likely to continue to recover under the government’s mini stimulus as evidence grows the economy is stabilizing, analysts said ahead of the release of data next week.
“May’s data will show a modest improvement,” said Wang Tao, an economist at UBS. “Exports have likely rebounded further, and fixed-asset investment growth probably stabilized as the mini stimulus offset weaker property investment.”
Wang expects the Consumer Price Index to rise 2.3 percent year on year last month as food prices have stopped falling.
Lian Ping, chief economist at the Bank of Communications, predicts a 2.6 percent rise in consumer prices in May, up from 1.8 percent in April.
“Pork costs have risen 21.3 percent on a monthly basis after the central government implemented a policy to control the supply of pork,” Lian said. “Thus even as prices of other products remained stable, the CPI will grow.”
In the first four months, China’s consumer prices added 2.2 percent from a year earlier, below 3.5 percent set by the government for this year.
Lian expects exports and imports to extend their recovery which started in April.
“Business and consumer sentiment in the United States and Europe has improved,” Lian said. “New export orders also picked up, so underlying export growth has likely strengthened in May.”
Lian expects exports to rise 7 percent in May and imports to gain 6 percent, up from their 1 percent rise in April.
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