20251211-招银国际-China_Economy_Deflationary_pressures_set_to_ease_but_impulse_remained_weak_7页_841kb

Overview: The report analyzes China's economy, concluding that deflationary pressures will ease, but reflation momentum remains weak due to underlying fragilities. It highlights mild reflation driven primarily by food and gold prices, with subdued durable goods and consumer demand.

Key Findings:

• Deflationary Pressures: Expected to ease in 2026, with CPI projected at 0.7% and PPI at -0.5%, but sustained low impulse limits sustainability.
• CPI Trend: November data showed a YoY rebound to 0.7% driven by food prices (especially vegetables) and gold, masking fragility; MoM declined to -0.1%, influenced by gold and services.
• PPI Trend: YoY contraction narrowed to -2.2%, but MoM gains indicate slight improvement; still impacted by anti-involution sectors and subdued downstream industries.
• Core Inflation: Stayed flat at 1.2% YoY, largely supported by gold, while durable goods prices remain lackluster.

Forward Outlook: Economic trends driven by lower energy prices, fiscal expansions, and continuous efforts; however, supply-pull reflation risks due to weak consumer demand and potential gold price volatility.

Supporting Data: Figures and charts on CPI, PPI, commodities, and PMI indicate seasonal and commodity-driven fluctuations, but core weaknesses persist; no significant divergence with projections observed.