(Yicai) Aug. 10 -- The Yicai Chief Economist Confidence Index edged up 0.2 point to 49.9 in August, signaling slightly improved sentiment among economists but remaining in contraction territory.

The reading remained below the 50 threshold that separates expansion from contraction, according to the latest survey released by the Yicai Research Institute yesterday. Thirteen chief economists participated in the poll.

Economists nevertheless expect China’s economy to maintain a moderate recovery, supported by more proactive fiscal policy, moderately loose monetary policy, and other measures outlined by policymakers for the second half of the year.

A July meeting of the Political Bureau of the Communist Party of China Central Committee, or Politburo, set the policy direction, calling for a faster transition from old to new growth drivers and better use of existing policy measures.

The Politburo, the Party’s top decision-making body, also called for implementing a more proactive fiscal policy and a moderately loose monetary policy.

Economic Indicators

The economists forecast China’s consumer price index and producer price index to have risen 0.7 percent and 3.9 percent, respectively, in July from a year earlier, higher than the official increases of 0.5 percent and 3.5 percent.

Their average forecast for fixed-asset investment was a 5.9 percent year-on-year decline in the first seven months of this year, widening from the official 5.7 percent drop in the first half.

The economists forecast total retail sales of consumer goods to have risen 1.6 percent in July from a year earlier, compared with the official 1 percent increase in June. They also predicted industrial added value to have climbed 4.8 percent year on year last month, slower than the official 5.3 percent gain in June.

Financial data for July likely declined from the previous month because of seasonal factors, according to the survey. The economists’ average forecasts were CNY130 billion (USD19.3 billion) for new loans and CNY1.4 trillion (USD207.5 billion) for aggregate financing to the real economy, while they expected broad money supply (M2) to have expanded 7.9 percent from a year earlier.

The central parity rate of the Chinese yuan in the interbank foreign exchange market was CNY6.7894 against the US dollar on July 31. The economists expect the yuan’s central parity rate against the US dollar to remain stable in August.

Their average forecast for the yuan against the US dollar at the end of this year is 6.72, slightly stronger than the 6.74 forecast made at the end of last month.

Editor: Emmi Laine