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.