(Yicai) June 9 -- A gauge of sentiment in China’s economy compiled by Yicai returned above the boom-bust line in June as chief economists regained confidence after China and the United States temporarily slashed import tariffs on most of each other’s goods.

The Yicai Chief Economists Confidence Index came in at 50.5 for this month, up from 49.84 in May, according to the findings of a survey of 14 leading China-based chief economists. The index was 50.33 in April, 50.65 in March, 50.62 in February, and 50.66 in January.

China’s trade surplus is expected to have widened to USD97.1 billion in May from USD96.2 billion in April, mainly thanks to the recent improvements in the external environment, the chief economists predicted. Export growth will likely come in at 5 percent.

The economists expect the consumer price index to have declined 0.13 percent and the producer price index to have fallen 3.06 percent in May from a year earlier. According to data released by the National Bureau of Statistics on May 10, the CPI and the PPI dropped 0.1 percent and 2.7 percent, respectively, in April from a year ago.

Retail sales of consumer goods likely rose 4.85 percent last month from a year earlier, versus a 5.1 percent increase the month before, according to the economists. Their average forecast for fixed asset investment growth for the period was 3.96 percent, slightly lower than the 4 percent in April.

Real estate investment probably fell 10.21 percent in May, better than the 10.3 percent drop the previous month, the economists predicted.

China is unlikely to make further changes to the reserve requirement ratio and interest rates this month, as the central bank introduced a policy package that included lowering the RRR, loan prime rate, and interest rates in May, according to the economists. The country’s monetary policy is expected to remain accommodative.

On May 30, the Chinese yuan’s central parity rate against the US dollar was fixed at 7.1848. The economists expect the yuan to remain relatively stable this month, with an average forecast for the central parity rate of 7.17 by June 30. They also revised their year-end forecast to 7.13 from the 7.17 they predicted last month.

Despite the positive trade talks in Geneva between China and the US, the economists cautioned that there are still no signals of an end to the disputes. They believe the China-US trade war is a long-term process and suggested Chinese policymakers should focus on enhancing industrial chain resilience, boosting effective demand, and continuing reforms and opening-up policies.

Editor: Futura Costaglione