Due to the “scarring effect” of COVID-19, Chinese consumer demand requires time to recover, but there is no long-term deflation, a PBOC official stated Thursday.
The world’s second-largest economy posted better-than-expected first-quarter GDP growth, but several experts argued the headline results disguise underlying weakness in household and foreign demand.
Despite the GDP boost, consumer price inflation is receding, and factory gate prices are plummeting.
At a Beijing news conference, PBOC monetary policy department chief Zou Lan said the PBOC projected consumer price inflation to rise later this year. Still, there was no basis for protracted deflation or inflation in China.
He said the central bank would monitor imported inflation.
Zou said the PBOC would maintain careful monetary policy despite global recession fears.
PBOC spokesperson Ruan Jianhong predicted rising household loan demand.
