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China's inflation rate rises 1.5% in December China's inflation rate rises to 1.5% in December
(about 3 hours later)
China's consumer inflation rate rose 1.5% in December from a year earlier, below the government's target of 3.5%, and sticking at a near five-year low. Inflation in China hovered near a five year low in December, rising to 1.5% compared with a year earlier, official figures have shown.
The country's official consumer price index (CPI) figure is its main inflation gauge. Consumer price inflation (CPI) for the whole of 2014 was 2% compared with 2013, well below the government's target of 3.5%.
The December figure reflects a seasonal hike in some food prices and compares with a rise of 1.4% in November. Analysts suggested the data pointed to persistent weakness in the world's second largest economy.
During 2014, China said its consumer prices grew 2% compared with 2013, state news agency Xinhua said. There were sharp rises in price of some food items, including 14% for eggs.
The mainland's government also released its monthly wholesale inflation rate for December, which measures factory prices for consumer goods, as well as wholesale prices of production materials. Producer price index (PPI) figures, which include wholesale and factory price inflation, also fell by a greater than expected 3.3% in December from a year earlier marking the 34th consecutive monthly fall since September 2012. Analysts had expected PPI to fall by 3.1% in December.
The Producer Price Index (PPI) figures showed wholesale inflation declined by 3.3% in December from a year earlier, more than expected and marking the 34th consecutive monthly fall. China's National Statistics Bureau said the fall was largely as a result of falling oil prices.
Analysts said the PPI numbers were pushed down by falling commodity prices and energy prices. Growth
Behind the numbers Together, the inflation numbers point to weak domestic demand across China, which some analysts say may give the government room to cut interest rates and take other measures to boost growth which has slowed to a five-year low of 7.3% in the three months to the end of September.
Together, the inflation numbers point to weak domestic demand across the mainland, which some analysts say may give the government more room to introduce policies and projects aimed at boosting the economy. On Thursday, China said the recent approval of infrastructure projects would not "play the role of using fiscal expenditure as strong economic stimulus in 2015" and that the projects were different to stimulus measures introduced in 2008.
On Thursday, however, China said the recent approval of infrastructure projects would not "play the role of using fiscal expenditure as strong economic stimulus in 2015" and that the projects were different to stimulus measures introduced in 2008.
Liu Ligang, an economist with ANZ in Hong Kong, said China's inflation had been "very tepid".Liu Ligang, an economist with ANZ in Hong Kong, said China's inflation had been "very tepid".
"Going forward, we do see the risk of deflation is rising, especially [as] PPI inflation has been in negative territory for over 34 months," he said."Going forward, we do see the risk of deflation is rising, especially [as] PPI inflation has been in negative territory for over 34 months," he said.
"That means there's no pass-through effected from PPI inflation into CPI inflation."That means there's no pass-through effected from PPI inflation into CPI inflation.
"In fact, CPI will continue to be dragged down by PPI inflation in the next few quarters [and] all this suggests the People's Bank of China will need to act more aggressively.""In fact, CPI will continue to be dragged down by PPI inflation in the next few quarters [and] all this suggests the People's Bank of China will need to act more aggressively."