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China's inflation cools to four-month low | China's inflation cools to four-month low |
(35 minutes later) | |
China's consumer inflation rate rose 2% in August from a year earlier, below the government's target of 3.5% and marking a four-month low. | China's consumer inflation rate rose 2% in August from a year earlier, below the government's target of 3.5% and marking a four-month low. |
The country's official consumer price index (CPI) figure is its main inflation gauge and the August figure compares with a rise of 2.3% in July. | The country's official consumer price index (CPI) figure is its main inflation gauge and the August figure compares with a rise of 2.3% in July. |
Lower prices for pork, a Chinese staple, contributed to the monthly CPI reading, state news agency Xinhua said. | Lower prices for pork, a Chinese staple, contributed to the monthly CPI reading, state news agency Xinhua said. |
But the drop in inflation would likely prove short-lived, said analysts. | But the drop in inflation would likely prove short-lived, said analysts. |
Pork prices dropped by 3.1% during the period. | Pork prices dropped by 3.1% during the period. |
However, the cost of fresh fruit rose by 21.2%, a factor that pushed the CPI reading up by 0.41 percentage points, official data showed. | However, the cost of fresh fruit rose by 21.2%, a factor that pushed the CPI reading up by 0.41 percentage points, official data showed. |
Looking ahead, though, analysts said that falling pig stocks in China would soon drive an increase in pork prices. | Looking ahead, though, analysts said that falling pig stocks in China would soon drive an increase in pork prices. |
"In the months ahead, with pork prices rising, food inflation might start to pick up," economist Julian Evans-Pritchard from Capital Economics told the BBC. | "In the months ahead, with pork prices rising, food inflation might start to pick up," economist Julian Evans-Pritchard from Capital Economics told the BBC. |
"I think overall we don't expect inflation to go above 3.5% this year," he said. | "I think overall we don't expect inflation to go above 3.5% this year," he said. |
Other analysts said an interest rate cut would be unlikely even though low inflation might warrant further easing. | Other analysts said an interest rate cut would be unlikely even though low inflation might warrant further easing. |
"... given Premier Li has mentioned clearly that there will be no big stimulus and no aggressive easing ... (authorities) are probably still in a wait-and-see mode," said economist Dongming Xie from OCBC Bank in Singapore. | "... given Premier Li has mentioned clearly that there will be no big stimulus and no aggressive easing ... (authorities) are probably still in a wait-and-see mode," said economist Dongming Xie from OCBC Bank in Singapore. |
Wholesale prices | Wholesale prices |
China also released its monthly wholesale inflation rate for August, which measures factory prices for consumer goods, as well as wholesale prices of production materials. | China also released its monthly wholesale inflation rate for August, which measures factory prices for consumer goods, as well as wholesale prices of production materials. |
According to official data, the producer price index (PPI) fell by 1.2% from a year earlier, marking 30 straight months of falls. | According to official data, the producer price index (PPI) fell by 1.2% from a year earlier, marking 30 straight months of falls. |
Analysts said the numbers suggested excess capacity in the industrial sector. | |
The factory price - or wholesale price of consumer goods - gained just 0.2% for the period, but wholesale prices of production materials fell 1.7% for the month. | The factory price - or wholesale price of consumer goods - gained just 0.2% for the period, but wholesale prices of production materials fell 1.7% for the month. |
Xinhua said the the data marked existing pressures from slowing economic growth in the country. | Xinhua said the the data marked existing pressures from slowing economic growth in the country. |
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