China News Service, Beijing, February 8 (Reporter Xia Bin) The China Monetary Policy Implementation Report for the Fourth Quarter of 2023 released by the Central Bank of China on the 8th stated that prices are expected to recover moderately when looking into China's macroeconomic finance this year.
The report stated that since the fourth quarter of 2023, the CPI (Consumer Price Index) has continued to operate in a negative range year-on-year. In addition to being affected by the high base of food prices such as pork, the price growth of durable goods and services has also been weak. The core CPI year-on-year has increased from the previous 0.8% dropped to 0.6%. Inflation fundamentally depends on the balance between supply and demand in the real economy. The current low price level reflects the lack of effective economic demand and the unsynchronized recovery of total supply and demand.
The report further pointed out that in the future, as the base effect gradually weakens and the demand for goods and services continues to recover, prices are expected to show a moderate recovery overall. The decline in PPI (industrial producer price index) is also expected to continue to converge. In the medium to long term, China is in a critical period of economic recovery and industrial transformation and upgrading. Supply and demand conditions are expected to continue to improve, monetary conditions are reasonable and appropriate, residents' expectations are stable, and there is no basis for long-term deflation or inflation.
The report also believes that China’s economy is expected to pick up further in 2024. First, investment continues to increase. The additional 1 trillion yuan (RMB, the same below) of treasury bonds issued in the fourth quarter of last year were carried forward and used, as well as the newly added 500 billion yuan of mortgage supplementary loan quotas, which will effectively stimulate the foundation of flood prevention and disaster relief projects, affordable housing, and "both emergency and emergency" projects. Investment in facility construction and urban village renovation will stimulate more private investment.
Second, consumption has steadily improved. As the impact of the epidemic subsides, corporate revenue and residents' income gradually recover, and consumption willingness continues to rebound. At present, China has a huge number of cars and home appliances, and there is sufficient demand and potential for replacement. There are still about 300 million new citizens in China. Improving supporting institutional arrangements and optimizing consumer financial services will also help expand market depth in education, medical care, elderly care and other fields. , Accelerate the cultivation of new consumption.
Third, foreign trade is highly resilient. The launch of a new round of economic and trade dialogue between China and the United States will help promote the healthy and stable development of bilateral economic and trade relations; China's economic and trade exchanges with the countries participating in the "Belt and Road" have become increasingly close, and the space for foreign trade development has continued to expand. (over)