Inflation dips as China weighs stimulus moves
Make us a preferred source
Make us a preferred source on Google
The news: China's deflationary pressures intensified in September as consumer inflation unexpectedly eased and producer prices fell at the fastest pace in six months, highlighting weak domestic demand.
The numbers: The consumer price index (CPI) rose by just 0.4% from a year earlier last month, compared to 0.6% in August, Reuters reported citing data from China’s National Bureau of Statistics. Producer prices meanwhile dropped 2.8% year-on-year in September, worse than the 2.5% forecast by economists polled by Reuters.
Core inflation, excluding volatile food and fuel prices, fell to 0.1% in September from 0.3%, marking the 20th consecutive month below 1.0%, while food prices rose 3.3%, up from 2.8% in August. Non-food prices dropped 0.2%.
Energy prices and tourism-related services, including airfares and hotel stays, saw further declines, with overall month-on-month inflation remaining flat.
The context: China's economic growth has been hampered by weak demand, excessive investment and structural issues.
The government has announced some stimulus measures, but economists are calling for stronger measures. Finance Minister Lan Foan over the weekend hinted at more "counter-cyclical measures" but offered no details on timing or size.
Stimulus announcements, such as mortgage rate cuts and debt issuance plans, have boosted markets, but concerns persist about the broader structural issues, including weak consumption and overreliance on debt-driven investment.
The source: Reuters
