(Yicai Global) May 10 -- The Yicai Chief Economist Confidence Index, which measures how top thinkers believe the Chinese economy performed in the month prior, hit a year high of 50.8 for April, showing overall optimism for development.
Key takeaways and predictions from the survey, in which 22 economists participated, were
- Every economist surveyed gave a positive outlook for the economy in April.
- New loans and social financing remained stable.
- Broad money (M2) supply increased from March.
- The annual growth rate of the consumer price index fell.
- The annual growth rate of the producer price index ended five straight months of decline.
- Fixed asset investment reduced slightly.
- The People's Bank of China is unlikely to adjust interest rates in May.
- The central bank is unlikely to adjust the reserve requirement ratio, the proportion of funds that lenders must deposit with the central bank, in May.
- The country will maintain its neutral monetary policy.
- The government will not change its aim to create stable economic growth.
- Competition between financial institutions will heighten due to relaxed restrictions on foreign investment in the sector.
- Interest rate liberalization will soon come to an end.
- The yuan will depreciate against the dollar to 6.361 at the end of May, compared with 6.339 at the end of April.
- The yuan will depreciate against the dollar to 6.448 at the end of the year.
Stable operation of the domestic economy and relaxed restrictions on foreign capital inflow will provide strong support for the yuan exchange rate, said Huang Jianhui, head of the China Minsheng Bank Research Institute. But the recent dollar rally, narrowing of the interest rate gap between China and the United States and heightened trade tensions will nudge the yuan down slightly in the short term, he added.
Editor: James Boynton