(Yicai Global) Sept. 7 -- Confidence in China’s economy fell for a fifth month in a row, according to chief economists polled by Yicai Global.

The Yicai Chief Economists Confidence Index slid to 51.03 this month, but remained above the expansionary mark of 50 due to the positive expectations about China’s economy in the coming months, the survey Yicai Global’s sister publication Yicai released yesterday showed.

Thirteen of the 22 economists expected a further cut of 50 basis points in the requirement reserve ratio for lenders this year, and two of them predicted the cut to happen this month. At the same time, 18 economists forecasted that the benchmark deposit interest rate and the one-year loan prime rate are not likely to change in the next month.

China’s monetary policy has been following a neutral line, but the focus is more inclined to stable growth, said Ding Anhua, chief economist at China Merchants Bank, adding that there may be another RRR cut in the fourth quarter and a smaller one-year LPR reduction by the end of the year.

The economy’s gradual recovery has led to steady growth in fiscal revenue, while fiscal expenditure has slowed after a modest pickup, Ding said. The increase in government bond issuance last month has given a positive signal that steady growth will rely more on fiscal firepower, he noted.

New loans in August are expected to have totaled CNY1.4 trillion (USD216.9 billion), versus CNY1.1 trillion a month earlier, and average social financing should have jumped to CNY2.8 trillion from CNY1.1 trillion in July. China’s M2 money supply may have gained 8.4 percent in August, slightly higher than July’s 8.3 percent increase.

The survey predicts average fixed asset investment to have climbed 9 percent in August from the same period last year, and that of retail sales of consumer goods to have risen 7.2 percent, both lower than July’s gains of 10.3 percent and 8.5 percent, respectively.

The economists gave an average prediction of 1.02 percent for consumer price inflation in August, up marginally from 1 percent in July, and an average prediction of 9 percent for producer price inflation, the same increase as in July.

Imports and exports are seen declining in August, with a trade surplus of USD46.9 billion, down from USD56.6 the previous month.

The economists’ median forecast for the Chinese yuan against the US dollar was 6.48 by the end of the month, and 6.52 by the end of the year.

Editor: Futura Costaglione