China's CPI grew 2 percent year on year , and its PPI slid 2.8 percent year on year in May, official statistics showed on Thursday.
“The inflationary pressure is smaller than expected, highlighting the weak domestic demand,” Dong Tao, Credit Suisse's Managing Director and Chief Economist for non-Japan Asia, told FxWirePro.
“But this should have limited impact to central bank's interest rate decision,” Dong Tao added. “Jun Ma and his team revised up CPI forecast substantially for this year, indicating that real interest rates are broadly intact. “
Jun Ma, the chief economist for China's central bank, forecasts that the economy will grow 6.8 percent in 2016, which was reported on Wednesday.
In Dong Tao's view, PBOC is likely to keep quantitative easing.
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