CPI slows to 2.3% on moderating food costs

By Wang Yanlin | July 9, 2014, Wednesday |

Online Edition

China’s inflation slowed to 2.3 percent in June as food costs increased at a moderate pace, leaving room for policies that support the economy.

The Consumer Price Index, the main gauge of inflation, rose 2.3 percent from a year earlier last month, the National Bureau of Statistics said today.

Inflation was 2.5 percent in May.

Food costs increased 3.7 percent in June, down from a 4.1 percent rise in May.

The Producer Price Index, the factory-gate measurement of inflation, remained negative for the 28th month after declining 1.1 percent in June. The gap narrowed from a 1.4 percent decrease in the prior month.

In the first half, inflation rose 2.3 percent, below the target limit of 3.5 percent for the year.

“Subdued inflation provides room for the authorities to launch more targeted stimulus policies in the second half,” said Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd. “Further monetary policy easing across the board will still be needed to help lift the confidence in China’s economy.”

Zhou said a reserve requirement cut, which allows banks to set aside less money, is likely in the early third quarter for China to meet its target of 7.5 percent growth for this year.

In the first quarter, GDP expanded 7.4 percent, the slowest in 18 months. The second-quarter figure is due to be released next week.

Economy

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CPI slows to 2.3% on moderating food costs

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