Pick-up in inflation data indicates marginal improvement in domestic demand, supportive real estate policy to help stabilize property sales – CICC
MACRO VIEWS & ANALYSIS
Pick-up in inflation data indicates marginal improvement in domestic demand, supportive real estate policy to help stabilize property sales – CICC
MACRO VIEWS & ANALYSIS

Pick-up in inflation data indicates marginal improvement in domestic demand, supportive real estate policy to help stabilize property sales – CICC

 

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China’s inflation data for August rebounded as expected, with CPI returning to growth, up 0.1% year over year, compared to a 0.3% drop in July, and PPI falling by 3%, compared to the 4.4% drop in July, slightly below CICC’s estimates of 0 growth and 3.1% drop, respectively, the broker said in a note.

Overall, the price changes reflected signs of marginal improvement in domestic demand, and attention should be given to the effective implementation of pro-growth policies, it said. 

Looking ahead, as the high base effect for hog and oil prices fades and pro-growth policies take effect, both CPI and PPI are expected to pick up further on a year-on-year basis in the coming months, it said.

The “three arrows” for the real estate market, namely lowering down payment requirements, lowering mortgage rates, and urban village redevelopment, should help stabilize property sales, increase household income, and boost real estate investments, CICC said.

China’s current policy measures are mostly aimed at stabilizing credit and there is greater room on the fiscal policy front, it added.