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China CPI growth hits 3-year low in October
By Wang Yanlin |
November 9, 2012, Friday
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Online Edition
Online Edition
CHINA'S October inflation grew at the slowest pace in nearly three years, paving the way for earlier easing policies to filter through, the National Bureau of Statistics said this morning.
But the country is unlikely to roll out new stimulus measures such as cuts in reserve requirement ratio and interest rates given the stabilizing economy, analysts said.
The country's Consumer Price Index, the main gauge of inflation, rose 1.7 percent from a year earlier last month. The pace moderated from an increase of 1.9 percent in September and was the slowest since February 2010.
Food costs, which account for nearly one third of the CPI basket, expanded 1.8 percent in October, easing sharply from a 2.5 percent rise a month earlier.
The non-food sector kept its growth flat at 1.7 percent.
The Producer Price Index, the factory-gate measurement of inflation, fell 2.8 percent year on year last month, compared with a 3.6 percent decrease in September.
"It is safe to say that inflation is no longer a threat to China's economy," said Li Maoyu, an analyst at Changjiang Securities Co. "We expect consumer prices will fluctuate around 2 percent in coming months, and the country has no problem to achieve the goal of keeping it under 4 percent this year."
In the first ten months, China's CPI expanded 2.7 percent, well under the target set at the beginning of this year.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said the moderating inflation means there is enough room for the central bank to keep its policies relaxed.
But because of measures such as repurchase agreements, market liquidity is staying at a relatively high level, making further policy easing unlikely, Zhou said.
China's gross domestic product grew 7.7 percent year on year in the first three quarters. Increased industrial production and fixed-asset investment showed signs of stabilization in recent months.
But the country is unlikely to roll out new stimulus measures such as cuts in reserve requirement ratio and interest rates given the stabilizing economy, analysts said.
The country's Consumer Price Index, the main gauge of inflation, rose 1.7 percent from a year earlier last month. The pace moderated from an increase of 1.9 percent in September and was the slowest since February 2010.
Food costs, which account for nearly one third of the CPI basket, expanded 1.8 percent in October, easing sharply from a 2.5 percent rise a month earlier.
The non-food sector kept its growth flat at 1.7 percent.
The Producer Price Index, the factory-gate measurement of inflation, fell 2.8 percent year on year last month, compared with a 3.6 percent decrease in September.
"It is safe to say that inflation is no longer a threat to China's economy," said Li Maoyu, an analyst at Changjiang Securities Co. "We expect consumer prices will fluctuate around 2 percent in coming months, and the country has no problem to achieve the goal of keeping it under 4 percent this year."
In the first ten months, China's CPI expanded 2.7 percent, well under the target set at the beginning of this year.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said the moderating inflation means there is enough room for the central bank to keep its policies relaxed.
But because of measures such as repurchase agreements, market liquidity is staying at a relatively high level, making further policy easing unlikely, Zhou said.
China's gross domestic product grew 7.7 percent year on year in the first three quarters. Increased industrial production and fixed-asset investment showed signs of stabilization in recent months.
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