(Bloomberg) -- The People’s Bank of China said the nation faces "slight rising pressure" on inflation, which should be "closely watched."
The PBOC said that a gauge of household inflation expectations had also risen from the previous quarter. "We need to continue to pay attention," the central bank said, according to a quarterly monetary policy report released late Wednesday in Beijing.
Ongoing efforts to cut excessive industrial capacity and clean up the environment are combining with resurgent commodity prices and base effects, contributing to the potential price gains, according to the document.
China’s consumer inflation slowed in January, though it had gained steadily throughout 2017. Economists surveyed by Bloomberg forecast consumer price gains of 2.3 percent this year, still well below the government’s target of 3 percent.
Factory-gate inflation is predicted to slow to 3.3 percent from 6.3 percent last year. As factory prices feed more directly through into the prices export customers pay, that trend suggests the world’s biggest trading nation won’t be passing on much more by way of inflation in the near term.
©2018 Bloomberg L.P.
With assistance from Yinan Zhao