Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 31 n° 321

Expert comment on China’s latest CPI figures

Posted by fidest press agency su sabato, 9 gennaio 2016

Manila_ChinatownKamel Mellahi, of Warwick Business School, Professor of Strategic Management and researches business in China said: “Concerns over disinflation will prompt further monetary easing as the CPI data strengthen the case for lower interest rates and supply side reforms.
“Higher food prices because of adverse weather conditions were the main driver behind higher CPI in December. They edged inflation up but there is no guarantee that they will continue rising in the coming months.”PPP – producer price index, which measures wholesale inflation – keeps on sliding, reflecting the protracted overcapacity, low commodity prices, and tepid domestic demand. Overcapacity in many sectors of the economy, particularly heavy industry, will continue to be a problem in 2016 and will push firms to lower prices to offload excess capacity and drive demand. There are no quick and easy solutions for the current overcapacity. The problem will have to be addressed incrementally over a period of time.”The prognosis for 2016 is mixed. The deflationary pressures are structural and are not going to go away. On the other hand, property prices are expected to keep going up, pushing inflation higher in 2016. Plus, the depreciation of the currency could push up the cost of imported goods driving inflation higher.”

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