The Strategist

China expects low inflation in 2022, counts on rising rates abroad

02/07/2022 - 09:13

China expects low inflation in 2022, counting on monetary tightening in other countries to slow the rise in commodity prices. Inflation in China was 0.9% last year.

Dave Steadman
Dave Steadman
China's inflation will remain low in 2022 if monetary policy changes in other countries dampen the rise in global commodity prices, Bloomberg reported, citing an official statement from China's National Development and Reform Commission.

It predicts that China's Consumer Price Index (CPI) will be positive in 2022. In 2021, the average annual inflation rate was lower than in previous years: 0.9%. At the same time, in November the index reached a maximum for 15 months (2.3%), but in December it fell to 1.5%.  

The commission expects China's inflation risks to decline in 2022 as the adverse effects of the COVID-19 pandemic and global supply shortages diminish. High global inflation may persist for a period of time, but monetary policy changes by regulators in major economies will dampen import price increases.