China to keep inflation target around 3 per cent in 2020 despite surge in pork prices, sources say

China’s consumer price inflation (CPI) rose to a near eight-year high of 4.5 per cent in November, as pork prices doubled due to the outbreak of African swine fever

The 2020 target will be officially unveiled in early March having been endorsed by top leaders at the annual closed-door Central Economic Work Conference last month

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China’s consumer price inflation (CPI) rose to a near eight-year high of 4.5 per cent in November, as pork prices doubled due to an outbreak of African swine fever. Photo: Bloomberg

Published: 4:19pm, 3 Jan 2020Updated: 11:02pm, 3 Jan 2020

China has decided to keep its inflation target unchanged this year at around 3 per cent, sources say, suggesting policymakers will continue to roll out economic stimulus gradually and avoid more aggressive measures.

Some analysts have speculated that Beijing will raise the inflation target to 3.5 per cent, which would give authorities more room to support the world’s second-largest economy as growth tails off to the slowest in nearly 30 years.

But policy sources told Reuters the government expects surging food prices to start easing in the second half of the year, as the government takes steps to address pork shortages.

The 2020 inflation target, to be unveiled at the annual parliamentary session in early March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference last month, according to three sources with knowledge of the meeting’s outcome.

The target will still be around 3 per cent. We cannot rule out the possibility that inflation may break 5 per cent in the coming months but that could be short-lived

Policy source

“The target will still be around 3 per cent”, one of the policy sources said. “We cannot rule out the possibility that inflation may break 5 per cent in the coming months but that could be short-lived”.