People's Bank of China Gov. Yi Gang said the nation's economic growth will be "relatively high" in the second quarter due to base effects, and consumer inflation will pick up in the second half of the year.

"We are confident, capable and have the conditions to achieve the expected growth and other targets set by this year's 'Two Sessions,'" Yi said in a meeting Wednesday with a group of entrepreneurs and bankers in Shanghai.

Yi's remark came as recent economic indicators pointed to a slowdown in China's economic recovery after Beijing lifted its Covid-19 restrictions late last year. Chinese exports fell in May from a year earlier, the first annual decline in overseas shipments in three months. The consumer inflation and factory-gate price index released Friday intensified worries about deflation risks as global and domestic demand weakened further.

The central bank governor said China's consumer-price index is expected to rise gradually in the second half of the year and reach above 1% in December. He said that high oil and vegetable prices in the year-earlier period provided a high comparison base for this year's inflation, adding that demand for auto and property-related products remained weak.

In its annual legislative session in March, Chinese leaders set an around 5% growth target for the economy this year, which most economists still think the nation will meet given the weak base of comparison with 2022, when repeated lockdowns hammered the economy.

Yi said in the meeting that the central bank will step up its counter-cyclical adjustments to fully support the economy and promote employment. The central bank will also use various monetary tools to maintain reasonably ample liquidity while pushing financing costs down further.

He also pledged to comply with market demand and respect enterprises' choice in the use of the yuan in cross-border transactions.


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(END) Dow Jones Newswires

06-09-23 0620ET