The head of China’s central bank vowed on Friday to maintain price stability amid high global inflationary pressure and said Beijing would focus on supporting small and vulnerable companies hit by Covid-19 outbreaks.
In a video speech to the annual Boao Forum for Asia, People’s Bank of China governor Yi Gang said China’s financial market is not immune to external shock and the worsening pandemic has also put more pressure on the economy.
“Recently, geopolitical tensions have further pushed up inflationary pressures worldwide. China’s financial market is not immune to the external shocks and the domestic Covid-19 situation is also putting more downward pressure on growth.”
With prices of commodities, food and housing soaring worldwide last year, the Ukraine war has added even more momentum to global inflation, threatening economic recovery worldwide and global financial stability.
“China’s monetary policy is accommodative and is in a comfortable range. We also stand ready to support small- and medium-sized enterprises with more instruments, if needed,” he said.
Given the growing headwinds, foreign finance houses have been downgrading gross domestic product (GDP) forecasts for China, increasing the pressure on China to hit its 5.5% target for 2022.
Japanese investment bank Nomura on Thursday revised its China GDP forecast to 3.9% for this year from 4.3%, its baseline estimates showed.
- Reuters, with additional editing by George Russell