China: Deflation pressure slightly relieved – ANZ

Analysts at Australia and New Zealand Banking Group (ANZ) said in their latest research note, “ we forecast China’s Consumer Price Index (CPI) for 2024 at 1.8%, with contributions of 1.0ppt from food, 0.2ppt from energy and 0.6ppt from the core.”

Additional quotes

“On the supply side, production cuts in energy and pork will likely lift August’s CPI to 0.2% from -0.3% prior. On the demand side, recent stronger-than-expected policy stimulus will gradually have a positive impact on prices.”

“Deflationary pressure will remain in the core. A new pork cycle, in particular, may start later than expected and add to CPI in 2024.”