Asia: Inflation risks are well contained - Commerzbank

In Asia, Analyst, Peter Kinsella at Commerzbank, expects that inflationary dynamics will remain generally subdued in 2017.

Key Quotes

“Chinese inflation dynamics illustrate signs of stabilization as can be seen with increasing PPI prints over the course of the year. This is a reflection of base effects and of increasing commodity prices. We think the latter was driven by speculation and we doubt whether this will be sustained. Consequently we expect that Chinese headline CPI will print around 2% for 2017.”

“In India inflationary dynamics improved (declined) over the course of 2016. This was due to the decent monsoon season which led to drops in food prices, a core component of Indian CPI. We think that CPI in India will have a similar profile in 2017, printing at levels around 5.3% for the year.”