Sunday, February 28, 2010

Keep an eye on China !!

China’s National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) will take center stage this week. We expect the government to reiterate its goal of continuity in overall macroeconomic policy this year and the importance of maintaining stable and relatively fast economic growth. China’s GDP growth target should remain at 8%, with its inflation forecast likely 3%-4%. Though China’s policy will remain growth friendly, that does not preclude a continuation of a gradual process of normalizing monetary conditions to contain asset price inflation and inflation expectations. China will continue to use reserve requirement changes to manage down excess liquidity; policy rate hikes and currency appreciation should follow in the coming months

No comments:

Post a Comment