(Yicai Global) June 9 -- China’s second-quarter economic growth rate will be relatively high, partly because of the low base of comparison from last year, People's Bank of China Governor Yi Gang said at a meeting in Shanghai this week. The consumer price index is also expected to pick up in the second half, having fallen in recent months, he added.

Yi said the PBOC will continue to implement a steady monetary policy in a powerful and targeted manner and it will enhance counter-cyclical adjustments to support the real economy, promote employment, and keep the financial system stable.

There will be comprehensive use of monetary policy instruments of various types to keep liquidity and credit reasonably ample, along with a push for a modest fall in comprehensive financing costs for the real economy, he added, but the emphasis on overall stability and keeping the yuan exchange rate steady will remain.

The application of financial services should be increased continuously, Yi stressed, particularly in the private sector and for rural vitalization campaigns. This will be helpful to stabilize employment in areas such as the service sector. Also, there should be increased efforts to support fundraising for firms in key areas such as science and technology and green development, he said. Reform and opening-up of the financial market should be advanced, with sustained optimization of policy to aid the yuan use in cross-border trade and investment.

Consumption is gradually increasing, he said. Total retail sales of consumer goods rose 8.5 percent in the first four months of the year, 8.7 percentage points faster than throughout 2022. This rise in consumption will be converted into higher incomes for firms and their employees, which will in turn drive more consumption.

The CPI and producer price index have fallen on a monthly basis in recent months. Yi said this was because the recovery of supply and demand does not necessarily happen simultaneously and also because of the previous base of comparison. The CPI is expected to be more than 1 percent on an annual basis by this December, Yi noted.

Editor: Tom Litting