China's national governor expects inflation to be below 2% this year

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China's national governor expects inflation to be below 2% this year

SHANGHAI - China’s national governor Yi Gang said he expects the country’s annual average inflation to be below 2% this year while cautioning against both economic and deflationary pressure despite inflationary uncertainty.

China will continue to implement structural monetary policy and should focus on the impact of normal monetary changes on the price stability, Yi told a financial forum in Shanghai.

Consumer prices are high this year in China, and the annual average inflation is expected to be below 2%, Yi said.

Of course, there are uncertainties in the overseas pandemic situation, economic recovery and macro policies so we should be on alert toward both inflationary and deflationary pressures in many aspects, yen said.

On Wednesday, data showed China's May factory gate prices rose by their fastest annual pace in over 12 years due to the global inflation pressures, also highlighting global inflation pressures.

Consumer prices rose in May - the biggest increase on one year on eight months - but remained well below the government's official target of around 3%.

China will also actively promote green monetary policy tools to support the economy's structural transformation, said Yi.

The central bank is looking to curtail credit growth to help contain debt risks, but is treading cautiously to avoid hurting the economic recovery, which has been uneven.

The future growth rate of China's economy is increasing, and rising productivity and reforms must be driven by aging population, Yi said, citing an increasing population.

The central bank will keep the yuan exchange rate practically stable, while introducing the exchange rate mechanism of China, Yi said, reaffirming the current stance.

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