China won’t see deflation in H2, CPI growth to approach 1% by year end – PBOC official

 

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The current setbacks in China’s economy are normal phenomenons in the post-pandemic recovery and long-term fundamentals have not changed, said Liu Guoqiang, deputy governor of the People’s Bank of China (PBOC), at a press conference on Friday.

“Many countries took about one year to recover from the pandemic and China’s only halfway after it adjusted epidemic controls,” he said.

The upward trend in China’s economy has not changed and the country is confident in the high-quality development, said Liu, adding that it’s good time for economic structure adjustments.

The PBOC will continue to implement the prudent monetary policy and make it more targeted and forceful, do a good work in cross-cyclical adjustments and give a full play to monetary and credit policy, he said.

China has sufficient policy room to deal with unexpected challenges and changes, he said.

“There is no deflation at the moment, and there will be no risk of deflation in the second half of the year, ” Liu said.

China’s M2 money supply and its economy have maintained growth, there is no deflation and there won’t be deflation in the second half of the year, said Liu.

China’s CPI growth is expected to remain weak in July before a rebound in August and the full-year CPI is expected to see a U-shaped trend and approach 1% at the end of the year, he said.