Chinese economists who predicted when the Chinese economy bottomed out a year ago now find that the risk of mild inflation and economic overheating is approaching. Peking University’s “Langrun Forecast†said that the growth rate of GDP (GDP) in the first quarter will reach 11.4%.
Growth returns to the fast lane. The “Langrun Forecast†includes 21 top Chinese and foreign macroeconomic research institutions including Peking University, Institute of Social Sciences, CICC, UBS Securities, National Information Center and Morgan Stanley. Many famous economists including Song Guoqing and others participated in the forecast.
After China’s economic success last year, the economists were optimistic about this year’s economic growth. The “Langrun Forecast†showed that the GDP growth rate in the first quarter could reach 11.4%, higher than the 8.7% growth rate last year.
In addition, the report predicts that the CPI (Consumer Consumer Price Index) will enter the “2 era†in the first quarter, reaching 2.4%. Lu Feng, a professor of economics at Peking University, said in his summary of the economists' views on the current economy: "Growth has returned to the fast lane, and inflation has entered an early warning period."
Is it hot or not hot?
Economists have subtle differences as to whether the economy is overheating.
Guo Xun Junan chief economist Li Xunlei said that the US retail sales in January increased by 10%, indicating that China's exports in February will have good performance, and if the US unemployment rate decline, the US consumption exceeded expectations.
"China's economy will show a trend of high and low after this year." Li Xunlei expects GDP to reach 11.5% in the first quarter, and the annual GDP growth rate will reach 10.5%. "In 2010, the annual GDP growth rate is above 10%. The overheating range, the economy is already hot."
However, Song Guoqing of the National Development Research Institute of Peking University believes that the current inflation rate and economic growth rate show that the overall economy is “not hot or coldâ€.
Inflation is only a tendency?
The continuous rise in CPI has reignited inflation concerns. In December last year, the CPI jumped to 1.9%, and it reached 1.5% in January this year. In November last year, this figure was only 0.6%.
Li Xunlei believes that the 2010 CPI will exceed 3%, but it is still in a moderate inflation range.
Song Guoqing said that the rise in CPI is related to extreme weather such as cold winter weather and unexpected snowstorms in the north. As the weather improves, market supply has recovered. “Now, inflation is lighter than at the end of last year, and it can only be said that there is a slight inflation tendency.â€
The interest rate hike started in April?
As CPI enters the "2 era" and GDP growth rate exceeds 11%, Li Xunlei said that the interest rate hike cycle is about to open. He expects the first rate hike to start in late April this year, raising interest rates twice a year, 27 basis points each time.
"Compared with the price increase, the real interest rate is now negative." Song Guoqing believes that considering the interest rate adjustment is more efficient in controlling the property market, interest rates can be adjusted, and should be adjusted. He said that the new loans in the first two months of this year are still somewhat high, and the current monetary policy can be tighter.
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