【招银国际】China Economy: Weaker CPI supports policy easing-250310（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 10 Mar 2025 CMB International Global Markets|Macro Research|Economic Perspectives China Economy Weaker CPI supports policy easing Feb CPI slipped into negative territ

2、ory due to the CNY mismatch and still-weak domestic demand.The Jan-Feb MoM CAGR of CPI and core CPI lagged historical seasonality,as food,service,and goods prices remained subdued.PPI continued to dip MoM,weighed down by declining energy and ferrous metal prices while final consumption goods remaine

3、d muted.The reflation in 2025 might be milder than expected due to weak employment and household income,as well as the downside pressure from the Trump tariff hikes.We expect Chinas CPI and PPI to recover from 0.2%and-2.2%in 2024 to 0.6%and-0.3%in 2025.Looking forward,the PBOC may cut RRR in 2Q25 an

4、d LPRs in 2H25 as the negative impact of Trumps tariffs might release and the stimulus effects of domestic policies could diminish.We expect additional RRR cuts by 50bps and LPR cuts by 20bps this year.CPI turned negative due to CNY mismatch but still reflected weaker seasonal patterns.Chinas CPI Yo

5、Y growth dropped to-0.7%in Feb from 0.5%in Jan,weaker than the-0.4%market expectation.CPI inflation was 0.1%YoY in Feb adjusted for CNY distortions according to the NBS.In sequential terms,CPI dipped to-0.2%in Feb from 0.7%in Jan,while Jan-Feb MoM CAGR of CPI grew by 0.25%,weaker than previous Jan-F

6、eb seasonality at 0.8%.Food price saw a 0.4%CAGR in Jan-Feb compared to the 2.6%CAGR in historical seasonality,dragged by weak pork,vegetable and grain prices.Pork prices may remain muted as inventories of breeding sows and live hogs stay elevated.Vehicle fuel price,on the other hand,showed a strong