Stronger April inflation and export data reduce urgency for monetary easing, pushing expected PBoC cuts into H2 2026.
China’s April Consumer Price Index and Producer Price Index rose more than expected, alongside resilient export growth, reinforcing a reflation trend. The data eases pressure on the People’s Bank of China to cut rates, despite soft domestic demand.
ING previously anticipated a rate cut but now expects the move to be delayed until the second half of 2026. Higher input costs for producers may sustain inflation but could also weigh on economic growth in the coming months.
The PBoC remains an outlier among global central banks, with its next move still likely a cut rather than a hike. However, barring a sharp downturn in activity data, policy easing is not expected soon.