China’s policymakers still have room for further easing even as the 2026
inflation outlook improves, according to Bank of America Securities.
The bank raised its 2026 forecasts for CPI to 1.0% and PPI to 1.2%, noting that
price gains are still mainly driven by global energy and commodity costs rather
than a domestic demand recovery.
It adds that inflation is likely to remain below the People’s Bank of China’s
target, leaving scope for additional rate cuts if domestic demand weakens.