Economists have upgraded their forecasts for China’s economic growth this year and project consumer inflation will continue to moderate.

Analysts projected faster economic expansion in each of the next four quarters in a Bloomberg survey from April 18 to 25 compared with forecasts in the March poll. They also reduced their expectations for factory and consumer inflation this quarter.

Growth in the world’s second-largest economy unexpectedly picked up to 6.9 percent in the first quarter, clocking its first back-to-back acceleration in seven years, while industrial output advanced, factory prices surged and investment recovered. The central bank has transitioned to a tighter policy framework, with increases for some bank lending rates.

Economists cut forecasts for consumer price index gains, which they expect to average 1.6 percent this quarter, down from an earlier estimate of 2 percent. They lowered full-year CPI estimates to 2 percent from 2.2 percent in the previous survey. Forecasts for the producer price index edged down to 6.7 percent for this quarter from 6.8 percent in the last poll, as analysts see a gradual easing of that pace in the coming year.

The People’s Bank of China will hold the benchmark interest rate and banks’ required reserve ratio unchanged this year, according to the median estimates in the survey.

Source: Bloomberg