Bank Report Expected 2011 The Prices Will Keep HighBank Report Expected 2011 The Prices Will Keep High

2011 China CPI will present before high low tendency, and after China's economic growth to slow.

In the second quarter of higher prices will rise

At present the central bank has will stabilize prices macro-regulation priority. For this year's CPI movements, the general manager of ABC strategic management HuXinZhi said yesterday, 2011 in the second quarter of prices or higher, some months could exceed 5%, the second half of the year, criterion gradually fell about 4.3 percent. The main reason is that, pork prices into the weak rise cycles; Interest rate hikes cycle coming, living under item "self-owned housing prices;" Public resources product price reform timeout, from live class captioned "gas" prices for hydropower pushed CPI will slow.

Deutsche bank in the greater China region, chief economist Mr Ma also believes this year's CPI year-on-year in the second quarter to 5% to 6% to the top of the second half began slowing to 3% - about 4 per cent.

But Mr Ma also points out, cannot eliminate several uplink risk more inflationary pressure, if first half policy tightening, inadequate because inflation expectations accelerate currency speed, climate anomalies may cause the agricultural prices up, international commodity prices continue to rise, then push CPI growth than expected.

Infrastructure investment growth will slow down

The ABC, 2011 that China's economic growth will be eased, but will still maintained a fast level, is expected to 2011 9.5% GDP growth. Mr Ma predictions were relatively conservative, he thinks, mainland Chinese GDP growth this year is 8.7 percent, the main reason is the export growth from last year to more than 30% drop of 15%, fixed asset investment growth from last year to 23% of 20% of the decline. In fixed asset investment in infrastructure investment growth will slows significantly, but affordable housing investment may increase 100%.

In fixed asset investment growth or export growth will slow HuXinZhi are also supported, but he also think transformation sex investment will replace real estate investment become this year, the main force affordable housing investment and high iron will become investment new green.

For economic slowdown bring worries, Mr Ma thinks, short-term perspective, China's economy are the biggest challenges facing inflation, China's economy if slowed to only 7% of concern.

It is necessary to keep raising interest rates

Agriculture bank points out, 2011 monetary policy will more emphasis on management inflation expectations and stabilize prices and fiscal policy will be more emphasis on economic structure adjustment. "With rising prices, and socan lend gap is expanding constantly, interest rates is necessary." HuXinZhi said. 2011 annual interest rate hikes 2-3 times more likely, higher interest rates by 50 to 75 basis points between. But he also thinks that had several times cycle of rising prices, the central bank monetary policy to see more tend to use the reserve fund rate means, legal deposit reserve rate is expected to raise 3-5 times. RMB will keep small gradual appreciation posture. The steady monetary policy guidance, 2011 credit increment in 7 trillion - 7.5 trillion between probability.

Mr Ma expected this year the deposit reserve will continue to raise a few times, raising rates 75 basis points, 4-5% renminbi appreciation. Tightening dynamics are mainly concentrated in the first half of the year. Mr Ma said, in the first half of the inflation continues to uplink process, because inflation itself uncertainty and to which the tightening of the uncertainty of the stock market will face more drag.
by Himfr Ivy
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