Chinese Central Bank Governor Says Inflation Set to Remain Moderate in 2023

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The head of the People’s Bank of China (PBOC) expects inflation in the Chinese economy to remain at moderate levels in 2023.

“China’s inflation rate is currently around 2%, and this has benefited especially from a bountiful harvest and the stability of energy prices,” said PBOC governor Yi Gang (易纲) at a forum jointly held by the Central Bank of Thailand and the Bank for International Settlements on 2 December.

“We expect that next year Chinese inflation will remain within a moderate zone.”

Yi highlighted the role of trends in the energy sector in keeping Chinese inflation under control.

“Chinese natural gas and oil prices are basically consistent with international levels; coal prices have maintained stability, and we are vigorously developing renewable clean energy,” he said.

“This will play an important role in maintaining the basic stability of Chinese power prices.”

Yi further pointed out that the China’s GDP growth rate came in slightly below expectations in the third quarter at 3.9% year-on-year, as a result of factors including the Covid pandemic.

In order to stabilise growth and employment, PBOC has recently introduced policies including a 25 basis point reduction to the reserve requirement ratio, as well as made use of structured monetary policy tools to strengthen support for agriculture, micro-and-small enterprises, private enterprise and green development.”