The People’s Bank of China (PBoC) admitted that the country’s consumer price index (CPI) could exceed 3% in the second half of 2022 in its second-quarter monetary policy report.
The comment comes after the Chinese CPI hit 2.7% in July, the highest in two years.
The current goal of the PBoC is to limit the CPI to 3%, an objective that must be achieved, according to the entity.
The Chinese central bank also warned that it does not intend to “flood” the economy with excessive liquidity, as it bolsters financial support with existing measures.
According to the PBoC, the recovery in consumption was hampered by weak family income and damaged balance sheets.
The monetary authority also said more efforts were needed to address rising youth unemployment and stabilize the country’s service sector.
The Chinese economy grew by just 0.4% year-on-year in the second quarter, making the government-set growth target of around 5.5% nearly impossible.
Chinese leaders implicitly abandoned the growth target at a meeting late last month, but pledged to stick to their strict policy against Covid-19 ahead of a major policy meeting in the coming months.
In its quarterly report, the PBOC reiterated that the government will not use the housing sector to stimulate the economy in the short term, but only to support real housing demand.
The Chinese central bank also said it plans to simplify procedures for foreign investors to operate in the Chinese financial market, as well as diversify the range of investment products available.
Source: CNN Brasil
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