(Yicai Global) Feb. 9 -- Confidence in China’s economy rose to the highest level in a year this month, with economic activity expected to rebound further over the coming months as the impact of Covid-19 wanes, according to a survey of chief economists.

The Yicai chief economist confidence index rose to 51.3 for February from 49.9 in January. A reading above 50 indicates positive sentiment.

The Chinese government is expected next month to set a growth target for gross domestic product this year of 5.3 percent, according to the average prediction of the 17 leading economists in China polled by Yicai Global. They expect a 2.7 percent target for consumer price growth.

Inflation is expected to be manageable in 2023, with consumer prices up 2.1 percent in January from a year earlier, higher than December’s 1.8 percent, and producer prices down 0.5 percent, improving on the prior month’s 0.7 percent, the economists forecast.

They also predicted that fiscal policy may be aggressive, while monetary policy remains loose. Adjustments next month in the benchmark deposit rate, the one-year loan prime rate, and the reserve requirement ratio for large financial institutions are less likely, the economists indicated.

The respondents to the survey, whose findings were published yesterday, forecast Chinese yuan loans to have increased sharply last month due to seasonal factors, reaching CNY4.08 trillion (USD600.9 billion) from CNY1.4 trillion (USD206.2 billion) in December. Social financing may have hit CNY5.58 trillion in January, surging from CNY1.31 trillion in the prior month.

M2, a broad measure of money supply that covers cash in circulation and all deposits, may have jumped 11.7 percent from a year ago, according to the economists, compared with an 11.8 percent gain in December.

China’s foreign exchange reserves rose 1.8 percent to USD3.185 trillion at the end of last month from the end of 2022, exceeding the average USD3.177 trillion prediction of the economists.

The Chinese yuan traded at 6.7604 versus the US dollar on Jan. 31. The economists predicted the redback to strengthen to 6.75 by the end of this month and to 6.58 by the end of the year, a 2.7 percent gain from the end of last month.

Editor: Martin Kadiev