China will maintain inflation target at around 3% in 2020

According to Chinese policy sources, Beijing plans on keeping its inflation target at 3% in 2020, in contrast to speculation that it might raise the bar to give room for extra economic stimulus.

The inflation target, which will later this year in March during the annual parliamentary session, was endorsed by top leaders at a conference last month, said three sources with knowledge of the meeting’s outcome.

Many analysts had expected China will raise the 2020 annual inflation target to 3.5%, thus allowing policymakers more room to manage a slowing economy.

China’s consumer inflation index has jumped to its near 8-year high of 4.5% in November 2019 following doubling of pork prices. Producer prices, which continue to remain in deflation for a fifth straight month, are also a giving a headache to policymakers, as they try to balance stable growth without piling on more debt and taking on more financial risks.

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