Next big inflation surprise looming in China

Bloomberg Economics forecasts an acceleration in China’s gross domestic product from 3% in 2022 to 5.8% in 2023. — Reuters

BEIJING: China’s reopening is set to provide a welcome boost to global growth, offsetting weakness in Europe and a looming recession in the United States.

But unlike in 2009, when China’s four trillion yuan (US$588bil or RM2.5 trillion) stimulus helped kick-start a recovery from the Lehman slump, in 2023 there’s a catch – a boost to inflation at exactly the moment the Federal Reserve (Fed) and other central banks race to bring it back under control.