China's CPI slows to 29-month low Published: 2012-7-9 17:03:00

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China's inflation eases to 29-month low

China's Consumer Price Index (CPI), a main gauge of inflation, has eased to a 29-month low driven by falling food prices, leaving the government ample room to introduce more pro-growth measures to boost the slowing economy.
China's PPI down 2.1% in June

China's Producer Price Index (PPI), a main gauge of inflation at the wholesale level, fell 2.1 percent in June from a year earlier, the National Bureau of Statistics (NBS) announced on July 9.

Highlighted datas:

●The China's consumer price index(CPI) grew 2.2 percent year on year in June, the slowest pace since January 2010.

●The Producer Price Index (PPI) fell 2.1 percent in June from a year earlier.

●Food prices, which account for nearly one-third of the weighting in the calculation of China's CPI, increased 3.8 percent last month from one year earlier, down from 6.4 percent in May. In the food price, pork prices fell 12.2 percent year on year in June, eggs declined 3.6 percent, while vegetable prices increased 12.1 percent.

                View  Points

Wen Jiabao, Chinese Premier:

China's economy is running at a generally stable pace, but there is still huge downward pressure. We need more aggressive efforts to preset and fine-tune economic policies.
Yao Jingyuan, a researcher from the Councilor's Office of the State Council:

In addition to food prices, easing wholesale prices at the factory gate due to over-capacity in a few industries and waning imported inflation also explained the slowing CPI.

Such trends will continue in the second half of this year, keeping China's CPI away from effects of the imported inflation.
Li Changan, a professor with the University of International Business and Economics:

It is too early to say the economy has fallen into deflation, considering the CPI still remained at a positive level.

With a faster-than-expected slowdown of the economy, policy fine-tuning is badly needed.

Related Comments:

Successive bank rate cuts highlight China stabilizing economic growth
The asymmetric interest rate cut will stimulate domestic demand as well as benefit borrowers. It will trigger more reasonable allocation of financial resources and eventually push forward the healthy development of real economy, echoing the policy of financial sector serving the real economy.

CPI statistics, low industrial growth rate worry markets, economists
The short-term drop in headline inflation has prompted speculation that the government is likely to loosen monetary policies

                 Charts for CPI datas

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Related report:

Inflation at lowest point in 29 months

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