(Yicai Global) Jan. 9 -- The Yicai Chief Economist Confidence Index, a gauge of confidence in China’s economy, advanced this month from a month earlier as a relaxation in the country’s pandemic prevention measures is expected to boost business.

The index climbed 0.43 percentage point in January from December to 49.86, according to the findings of the survey published by the Yicai Research Institute yesterday. It remained just under the benchmark of 50. A reading above 50 indicates expansion and one below reflects contraction.

The recent flare-up of Covid-19 will hit the economy in the short run but after that the economy should bounce back, the survey said, citing the 18 chief economists polled.

December’s economic data will fall below market expectations due to the latest outbreaks of the novel coronavirus, said Serena Zhou, Asia economist at Mizuho Securities. But things should get much better after the Lunar New Year holiday at the end of January and this will help the whole-year growth rate to top 5 percent.

Inflation will remain modest in December, the economists said. The consumer price index, a gauge of inflation, will climb 1.81 percent year on year, 0.21 percentage point higher than November’s CPI growth rate, announced by the National Bureau of Statistics. And the producer price index, a measure of factory gate prices, could dip 0.36 percent, a narrowing of 0.94 percent from November’s official figure.

China’s economy will still be under a lot of external pressure this year, said Lian Ping, president of Zhixin Investment Research Institute. The contribution of exports to economic growth will recede as demand from Europe and the US weakens. These countries might fall into recession as the international political situation gets more tumultuous and due to increased downward pressure on the global economy.

China's trade surplus will continue to widen in December as exports drop, the economists said. It is likely to expand to USD73.3 billion from November’s USD59.8 billion. The drop in exports may increase to 10.48 percent from 8.7 percent while that of imports might narrow to 9.08 percent from 10.6 percent.

December credit is also likely to be less than November. New yuan loans may fall to CNY1.8 trillion (USD265.3 billion) from CNY1.21 trillion, with total social financing could be down to CNY1.68 trillion from CNY1.99 trillion, they said.

Editors: Dou Shicong, Kim Taylor