ING economists Lynn Song and Min Joo Kang expect China’s February CPI inflation to rise to 1.0% year-on-year, mainly due to Lunar New Year effects, while the impact of higher oil prices is expected to emerge later. They also forecast solid growth in exports and imports in the first two months, which will translate into a larger trade surplus.

Lunar New Year will raise CPI

“China will release CPI inflation data for February next Monday. We expect CPI to rise to 1.0% year-on-year on the back of momentum from the Lunar New Year effect. The impact of higher oil prices as a result of the Middle East conflict is likely to be visible only in March data.”

“China’s trade data for the first two months of the year are also scheduled to be released on Tuesday.”

“The divergence in PMI data suggests that external demand has likely remained resilient to the start of the year, and we expect exports to grow 9.3% y/y and imports to grow 8.5% y/y in the first two months of the year, resulting in a trade surplus of $188.1 billion.”

(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)