Output prices of production materials fell 7.7% in September, contributing 5.8 percentage points of the PPI drop during the month, while those of consumer goods edged down 0.3% during the period.
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But even the government concedes the economy is entering a slower growth phase after decades of breakneck expansion.
This is lower than economists had predicted, as a recent Reuters poll had the average forecast at 1.8 per cent.
Referring to a new study by the Center for Strategic and global Studies (CSIS), NAB said that adopting the latest methodology would result in a significant increase in the estimated size of the Chinese economy.
Growth is expected to slow further to 6.5 percent in 2016.
“We expect the government to maintain loose monetary policy and step up fiscal spending in response to the economic slowdown”, economists at China worldwide Capital Corp (CICC), a domestic investment bank, said in a note.
Instead of calming financial markets, a surprisingly resilient reading on Monday could reinforce scepticism about the reliability of Chinese official data. Growth data for the third quarter is due next week.
In a bid to stoke activity, the central bank already has cut lending rates five times since November to 4.60 percent, and lowered the amount of cash that the biggest banks must hold as reserves to 18.0 percent. But that was the lowest level since the 2008 financial crisis and analysts said a stock market boom pushed up activity in financial industries, masking declines in other industries.
Consumer prices rose 1.6 percent over a year earlier, driven by a 2.7 percent rise in food costs, data showed Wednesday. This marks China’s 43rd consecutive month of producer deflation.
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Annual retail sales growth was seen at 10.8 percent in September, unchanged from August. The country’s imports fell more than 20 percent in September, falling far short of analyst forecasts.
