China’s consumer inflation hits 5-month low, leaves room for more stimulus
Consumer prices in China grew by 0.2 per cent in November, while the cost of goods at the factory gate fell for the 26th month in a row
China’s weak consumer price growth in November leaves plenty of room for further monetary policy easing, with earlier stimulus having eased fears of deflation, analysts said.
Analysts attributed the slowdown in November to food prices, which grew by just 1 per cent from a year earlier thanks to declines in the prices of beef, mutton and edible oils, while NBS chief statistician Dong Lijuan attributed the changes to high temperatures and declining travel demand.
Non-food inflation, though, managed to recover to zero per cent growth year on year after two months of deflation.
“Deflationary pressure remains an overhang as slowdown of food prices and continued soft non-food prices led to inflation coming in barely above zero per cent in November,” said Lynn Song, chief economist for Greater China at ING.
On a month-on-month basis, China’s CPI in November fell by 0.6 per cent following a fall of 0.3 per cent in October.
