20230911-招银国际-China_braces_for_mild_reflation_with_credit_7页_827kb

China's August CPI growth rebounded to 0.1% YoY, primarily driven by service and energy price increases, while core CPI remained unchanged. PPI declined 3% YoY in August, narrowing its year-over-year drop due to rising raw material and energy prices. The report forecasts mild reflation ahead, with CPI expected to rise to 0.6% in 2023 and 2% in 2024, and PPI projected to drop 2.7% in 2023 before rising 1.3% in 2024. This is supported by ongoing credit loosening, improving demand, and alleviating de-stocking effects, but durable goods demand and overcapacity pressures persist. The analysis suggests a moderate policy easing stance.