BEIJING - China posted steady economic growth in May, supported by a string of solid data, according to a report by Standard Chartered Bank.

China's official manufacturing purchasing managers' index (PMI) increased by 0.5 percentage point to 51.9 in May, the highest since September 2017, suggesting solid production activity, the report said.

The bank estimated a year-on-year increase in consumer price index (CPI) inflation to 1.9 percent for May, up from 1.8 percent in April on higher non-food inflation, which was likely driven by an increase in travel and transportation expenses during the May Day holiday and rising global oil prices.

"We expect producer price index (PPI) inflation to have risen further to 4.3 percent year-on-year in May, based on interim data. The latest producer output price PMI rose to a five-month high," it said.

Retail sales growth is likely to improve to 9.9 percent, helped by the May Day holiday. Infrastructure investment may have picked up as authorities urged effective budget implementation. Fixed-asset investment growth is likely to stay firm at 7 percent.

Trade performance is expected to have remained solid, with both exports and imports growing in the double digits. The bank expected the trade surplus to have widened to $33 billion.

Growth of M2, the broad money supply, is likely to accelerate to 8.8 percent year-on-year from 8.3 percent in April. The reserve requirement ratio (RRR) cut in April increased the money multiplier, and the central bank also made a net liquidity injection through open-market operations during the month.

Chinese yuan loans and total social financing (TSF) growth may have both inched up in May, the report said.