A Year of Not Worrying About Inflation

摘要

We expect CPI inflation to average 2.0% and 3.6%, respectively, in 2012 and 2013 We think of inflation as a three-year cycle; 2012 will be the bottom We expect another RRR cut before end-2011, and five more cuts in 2012 One of our non-consensus calls for 2012 is very low CPI inf lation in China. We expect CPI inflation to drop sharply in H1, before rising above 4% y/y again in Q3-2013. We forecast average inflation at 2.0% in 2012 and 3.6% in 2013 (see Chart 1). Here are