A year-on-year rise of 1.3 percent in the consumer price index (CPI) – a main gauge of inflation – released by the National Bureau of Statistics was the lowest since May and down sharply from 1.6 percent in September.
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On a month-on-month, basis, consumer prices declined 0.3%. Prices had increased 0.1 percent in September.
China’s economy rose 6.9 percent year on year in the third quarter, its slowest rate since 2009. A Reuters poll expected a 1.5 percent rise. Consumer prices in October…
China’s consumer inflation in October eased to its weakest level in five months as a result of falling oil and other commodity prices, combined with weak demand, adding to fears of deflationary pressure, official data showed Tuesday. The Aussie stood at $0.7049, recovering from a one-month trough of $0.7016.
“The risk of deflation has accentuated”, Australia & New Zealand Banking Group Ltd Hong Kong-based Greater China economist Liu Li-gang (劉利剛) said.
On average, between January and October, the PPI decreased 5.1% year-on-year, the purchasing price index for manufactured goods went down by 6% compared to October of last year.
October trade figures widely missed forecasts, with exports falling 6.9 percent and imports tumbling 18.8 percent.
China is not the only major economy battling low inflation. The index fell 5.1 percent from a year ago in the January – October period.
The weak readings open the door to further monetary policy easing, along with a further weakening in the renminbi.
Six interest-rate cuts and multiple releases of bank reserves have all been aimed at recharging growth.
“So even if the central bank has room, it may not cut interest rates again until next year”, China Minzu Securities Co (中國民族證券) analyst Zhu Qibing (朱啟兵) said.
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“With domestic and foreign demand likely to remain subdued, we expect China’s central bank to continue to see room to ease monetary policy in the months ahead”, said Bill Adams, an economist at PNC Financial Services.
