【招银国际】Deflation pressure rises amid the US tariff shock-250411（7页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 11 Apr 2025 CMB International Global Markets|Equity Research|Economic Perspectives China Economy Deflation pressure rises amid the US tariff shock Chinas Mar CPI furt

2、her contracted MoM dragged by food and energy prices.Core CPI growth remained subdued due to weak consumer demand and excess supply capacity.The downturn of PPI deepened,weighed by falling energy prices and weak domestic construction demand.Trumps aggressive tariffs may add deflationary pressure to

3、China by reducing overseas demand,undermining confidence and increasing excess capacity.China needs to further loosen monetary policy and launch additional fiscal stimulus to boost housing market and consumer demand.The PBOC may cut RRR and LPRs in 2Q25 by 50bps and 20bps respectively,and the Minist

4、ry of Finance may increase the magnitude of fiscal stimulus especially for targeting consumption in 2H25.We lower the forecast for Chinas CPI and PPI growth rates in 2025 from 0.6%and-0.3%to 0.2%and-0.8%respectively.CPI further contracted dragged by food and energy prices.Chinas CPI YoY growth rebou

5、nded from-0.7%in Feb due to CNY mismatch to-0.1%in Mar,in line with market expectation.In sequential terms,CPI further dipped to-0.4%in Mar from-0.2%in Feb.Food price further retreated from early-year peak,dropping 1.4%MoM in Mar,as pork and vegetable prices declined 4.4%and 5.1%MoM.Pork price may n

6、arrowed its MoM decline in Apr as indicated by the wholesale price,but it should remain muted as inventories of breeding sows and live hogs stay elevated.Vehicle fuel price dropped notably in Mar to-3.5%MoM from 1.3%in Feb,following the decline of global crude oil price in Jan.CPI MoM may rebound mo