BEIJING (Reuters) - China’s consumer prices are likely to rise modestly this year while property prices in some major cities could climb, the state planner said in a report published in the China Securities Journal on Tuesday.
“Consumer price rises will not be too large as economic growth will continue to steadily slow,” the price monitoring center of the National Development and Reform Commission (NDRC) said in the report.
China aims to keep consumer inflation at around 3 percent in 2016 to reflect factors such as rising labor costs, price fluctuations of agricultural products and the impact of further price reforms.
China’s producer prices will continue its clear downward trend, but the extent of its decline will be reduced, the report added.
Annual consumer inflation edged up to 2.3 percent in February - the fastest pace since July 2014, while producer prices slowed their slide for a second straight month, taking some pressure off policymakers to rush out more monetary easing.
The government aims to keep annual consumer inflation around 3 percent this year.
Property prices in some of China’s second-tier cities may rise significantly, and prices in Beijing, Shanghai and Shenzhen will also continue to rise, it said.
Real estate in third and fourth-tier cities will continue to face downward pressures, the report said, but prices in some third and fourth-tier cities may rise.
Municipal authorities in Shanghai have tightened mortgage down payment requirements for second home purchases, in a move to cool an overheating property market and reduce fears of a bubble.
The Chinese yuan is likely to face slight depreciation pressures in 2016, with fluctuations increasing as the U.S. dollar strengthens, the report said.
Wage rises will slow as the economy continues to slow, profit growth decreases and more businesses lose money or go bankrupt, the report said. Job opportunities will also decrease as China tackles overcapacity and automation increases.
Reporting by Sue-Lin Wong; Editing by Kevin Yao and Simon Cameron-Moore