Financial institutions forecast November CPI to be regularized

A study by several financial institutions yesterday predicted that, following a sharp narrowing in September CPI year-on-year decline, the CPI decline in October will be further narrowed on this basis, to November is expected to become positive growth.　　The bank's report pointed out that the trend of price recovery has been determined, 2010 China's prices will return to the rising track, the initial estimate for the year 2010 CPI Year-on-year Rise of about 4%.　　Tang Jianwei, a bank analyst, predicts that CPI growth in October was about 0.7% per cent year-on-year, with negative growth for the 9th consecutive month since February 2009.　　Although the October CPI decline did not fall sharply, it is expected that with the end of the year the seasonal rebound in food prices, the decline in non-food prices and the negative effects of the subsequent months, Tang Jianwei said that the November CPI will shift to positive growth. "But as prices have rebounded less than expected in the near term, we have adjusted the annual CPI growth forecast from about 0.5% to 0.8%."　　Tang Jianwei said that although the recent rebound in prices is lower than expected, but the trend of price recovery has been established, in 2010, China's prices will return to the rising track, the initial estimate for the year 2010 CPI Year-on-year Rise of about 4%. Sun, chief economist for Nomura Securities China, says CPI deflation has bottomed out in July and will reproduce inflation in November. "But we expect CPI inflation to remain modest until 2011." Sun also said there was no sign of austerity measures such as interest rate hikes, and that the current policy posture would last until March at least.