China is set to release its Consumer Price Index (CPI) inflation data for February next Monday, with ING economists Lynn Song and Min Joo Kang projecting a year-on-year increase to 1.0%. This rise is attributed primarily to the Lunar New Year effect, while the impact of higher oil prices stemming from the Middle East conflict is expected to be reflected in March's data rather than February's figures [1].
Additionally, China's trade data for the first two months of the year will be published on Tuesday. ING forecasts robust growth in both exports and imports, with exports anticipated to grow by 9.3% year-on-year and imports by 8.5% year-on-year. These figures are expected to result in a substantial trade surplus of $188.1 billion over the period [1].
The divergence in Purchasing Managers' Index (PMI) data indicates that external demand for Chinese goods likely remained resilient at the start of the year, supporting the positive outlook for trade performance [1].
ING's analysis suggests that while inflation is picking up modestly, the main drivers are seasonal and external factors, and the trade data points to continued strength in China's export sector. The economists note that the effects of higher oil prices will become more apparent in the March data, implying potential future inflationary pressures [1].
CONCLUSION
China's February inflation and trade data are expected to show modest recovery, with CPI rising to 1.0% year-on-year and a significant trade surplus driven by strong export and import growth. While the immediate market impact is positive, ING economists caution that higher oil prices may influence inflation in the coming months.