Hopes that Chinese economy is stabilising as inflation steadies

City A.M. Reporter
MUTED inflation data yesterday added to a run of August figures suggesting the protracted slowdown in China’s economy may be bottoming out, helped by targeted support measures and signs of improved export demand.

A steady consumer inflation rate also gives the People’s Bank of China some room to manoeuvre in response to any shock that might arise as the US Federal Reserve starts to taper its monetary stimulus.

Chinese consumer prices rose 2.6 per cent in August from a year earlier, the National Bureau of Statistics said, in line with market expectations and July’s 2.7 per cent rise.

Month-on-month, prices were up 0.5 per cent, slightly stronger than a forecast rise of 0.4 per cent.

Producer prices fell an annual 1.6 per cent, less than a fall of 2.3 per cent in July.

While factory-gate deflation has now lasted for 18 months, the pace of decline has steadily eased from a peak of 3.6 per cent in September 2012.