Prices of commodities, food and housing soared worldwide last year and the Ukraine war has added even more momentum to global inflation, threatening economic recoveries worldwide and global financial stability.
“The international landscape is fraught with uncertainties,” Yi said.
“Recently, geopolitical tensions have further pushed up inflationary pressures worldwide. China’s financial market is not immune to the external shocks and the domestic COVID-19 situation is also putting more downward pressure on growth.”
The PBOC will ensure price stability, while stable grain output and energy supply will ensure China’s inflation will remain within a reasonable range this year, Yi said.
Consumer inflation quickened more than expected, to 1.5 per cent in March from 0.9 per cent in February, official data showed, though it is not running as hot as in many other countries. The government has set an annual price target of around 3 per cent for 2022.
In contrast to most major economies that have started to tighten monetary policy to combat inflation, China has stepped up easing to cushion its slowdown.
Last week, the PBOC said it would cut the amount of cash that banks must hold as reserves for the third time in nine months. But on Tuesday, it surprised many investors by keeping its benchmark lending rates unchanged.
Analysts say the PBOC’s caution could also reflect concerns about the market impact of aggressive monetary tightening expected from the Federal Reserve in the coming months, which could lure funds back to higher-yielding US assets.
China’s stock markets are already the second-worst performers globally this year after sanctions-hit Russia.
The International Monetary Fund on Tuesday cut its growth forecast for China this year to 4.4 per cent, well below Beijing’s target, citing widespread lockdowns and supply chain disruptions.
Foreign finance houses also have been downgrading their forecasts.
Japanese investment bank Nomura on Thursday cuts its China growth forecast to 3.9 per cent for this year from 4.3 per cent its baseline estimates showed. Nomura also believes there is a rising risk of recession unless more support is forthcoming.