NBS statistician Yu Qiumei attributed the moderated inflation largely to eased food prices.
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“What’s holding them back from further easing is not inflation concerns, it’s concerns of credit risks”.
It marked the slowest annual growth in CPI since May previous year, and is now running well below the 2.3% pace seen just four months earlier.
According to China’s National Bureau of Statistics, CPI grew by just 1.3% in the year to August, a figure that was well below the 1.8% pace seen in July and expectations for a decrease to 1.7%.
The CPI during August 2016 increased by 0.45 percent compared with August 2015.
A housing and construction rebound has boosted industries including steel and coal, and while many sectors continue to struggle with overproduction, domestic demand has held up reasonably well, with trade data on Thursday showing a surprising improvement in imports.
The Bank of Korea will wrap up its monetary policy meeting and then announce its decision on interest rates; the central bank is widely expected to keep its benchmark lending rate steady at 1.25%.
Consumer price inflation (CPI) climbed an annual 1.3 percent, slower than the estimated 1.7 percent rise and July’s 1.8 percent spike. Prices of pork, China’s staple meat, rose only 6.4 per cent versus a 16.1 per cent increase in July.
Non-food inflation rose by 1.4% from a year earlier, unchanged from July. Analysts had expected PPI to fall 0.9 per cent.
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Fading producer price deflation points to stronger Chinese nominal growth, noted Shane Oliver, head of investment strategy and chief economist at AMP Capital.
