Home
News
In Focus
Business
Metro
Nation
World
Sports
Feature
Opinion
View more »Opinion Columns
Wan LixinOpinion deputy editor of Shanghai Daily
Restaurants get off to a quick start thanks to game-changing policies
High service charges on event ticket refunds call for further regulation
Sunday
- Subscribe
Related News
Lower CPI may lead to cuts in interest rate
By Zhang Fengming |
January 23, 2009, Friday
|
Print Edition
Print Edition
CHINA'S slower inflation leaves the central bank with more room to cut interest rates, possibly one more before the Lunar New Year, to shore up a slowing economy, economists said yesterday.
China's consumer price index, the main gauge of inflation, rose by 1.2 percent year on year in December, down from November's 2.4-percent growth. The December inflation is at its lowest level since July 2006. It is also the third straight monthly drop.
Inflation for the whole of 2008 was 5.9 percent.
China's economy grew a slower-than-expected 6.8 percent in the fourth quarter, meaning that growth for 2008 came in at 9 percent.
The threat of inflation was a worry for Chinese authorities in the first half of 2008. However, inflation tamed in the second half as global financial markets were routed and international commodity prices corrected. Now, economic growth is the top priority for authorities as inflation wanes.
Ken Peng, a Citibank economist, said yesterday that he cut the forecast on China's economy this year from 8.2 percent to 7.6 percent, after touching a low of 6.3 percent in the first half.
Sherman Chan, a Moody's Economy.com economist, said modest CPI growth in recent months has allowed the People's Bank of China to continue with its monetary easing as lower interest rates will help to soothe a debt burden, and support consumption and investment.
"Following the release of the disappointing December quarter GDP numbers, it is a possibility that the central bank will announce another round of interest rate cuts to boost sentiment ahead of the week-long Lunar New Year," Chan said.
Standard Chartered Bank said yesterday that it expected another round of rate cuts of 130 basis points in the first half of the year.
The central bank has cut the interest rate five times since September. The key one-year lending rate now stands at 5.31 percent.
China's consumer price index, the main gauge of inflation, rose by 1.2 percent year on year in December, down from November's 2.4-percent growth. The December inflation is at its lowest level since July 2006. It is also the third straight monthly drop.
Inflation for the whole of 2008 was 5.9 percent.
China's economy grew a slower-than-expected 6.8 percent in the fourth quarter, meaning that growth for 2008 came in at 9 percent.
The threat of inflation was a worry for Chinese authorities in the first half of 2008. However, inflation tamed in the second half as global financial markets were routed and international commodity prices corrected. Now, economic growth is the top priority for authorities as inflation wanes.
Ken Peng, a Citibank economist, said yesterday that he cut the forecast on China's economy this year from 8.2 percent to 7.6 percent, after touching a low of 6.3 percent in the first half.
Sherman Chan, a Moody's Economy.com economist, said modest CPI growth in recent months has allowed the People's Bank of China to continue with its monetary easing as lower interest rates will help to soothe a debt burden, and support consumption and investment.
"Following the release of the disappointing December quarter GDP numbers, it is a possibility that the central bank will announce another round of interest rate cuts to boost sentiment ahead of the week-long Lunar New Year," Chan said.
Standard Chartered Bank said yesterday that it expected another round of rate cuts of 130 basis points in the first half of the year.
The central bank has cut the interest rate five times since September. The key one-year lending rate now stands at 5.31 percent.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
