China’s inflation rate falls again in further sign of weakening demand in the economy
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Consumer inflation in China fell to 1.3 per cent year-on-year in October, the authorities said on Tuesday, in another sign of weak demand in the world’s second-largest economy.
China is a key driver of global growth, but expansion slowed to its lowest rate in nearly a quarter of a century in 2014 and has continued to weaken this year.
The rise in the consumer price index, a main gauge of inflation, released by the National Bureau of Statistics was the lowest since May and down sharply from 1.6 per cent in September.
It was also well below market expectations of 1.5 per cent in survey of analysts by Bloomberg News.
Moderate inflation can be a boon to consumption as it pushes buyers to act before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth.
The authorities pledged to accelerate reforms at a key Communist Party meeting, but analysts warn that more needs to be done to avoid a hard landing for the economy.
The producer price index, which measures the cost of goods at the factory gate, fell 5.9 per cent year-on-year in October, matching the figures for September and August, which represented a six-year low.
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Consumer inflation has been at or below two per cent for all of 2015, while the drop in the producer price index, a leading indicator for consumer inflation, was the 44th consecutive monthly fall.
Economic growth in China hit a 24-year low of 7.3 per cent in 2014 and has slowed further this year, with gross domestic product increasing seven per cent in each of the first two quarters.
Domestic and overseas demand have slackened, with official trade data at the weekend showing imports down nearly 19 per cent in October and exports falling almost seven percent.
