Inflation in China will remain modest in 2022, the nation’s top economic planner said a statement Sunday, if shifting monetary policies elsewhere weaken the rally in global commodities.
The National Development and Reform Commission expects China’s inflation risks will fall this year, as the adverse impacts of Covid and global supply shortages grow less severe.
It forecasts the consumer price index to rise this year, after retreating in December from 15-month high, according to the official statement. The full-year 0.9% average increase was lower than previous years.
The producer price index, up 8.1% last year, is also likely to cool down, the agency said, citing ample domestic supply of industrial and energy products to counter “irregular price fluctuation.”
As global commodity prices rose sharply last year, Beijing cracked down on hoarders and capped domestic coal, gas and steel prices. It said prudent monetary policy helped it avoid flooding markets with unnecessary stimulus.
Oil prices hit a seven-year high on Friday and is expected to climb further.
China expects monetary tightness in western countries to weaken price inflation on imports. Bloomberg economic estimates the Group of Seven central banks will cut total 2022 asset purchases to just 10% of the 2021 level.