China Focus: January inflation at 5-year low, prompting further policy easing

BEIJING, Feb. 10 (NsNewsWire) — China’s consumer inflation slowed to the lowest level in more than five years, fuelling market hopes of further easing in monetary policies to support the faltering economy.

The consumer price index (CPI), the main gauge of inflation, grew 0.8 percent year on year in January, the National Bureau of Statistics (NBS) said Tuesday. The rise marked the slowest pace since November 2009, when the rate settled at 0.6 percent, reports Xinhua.

Food prices, which account for nearly one-third of China’s CPI weighting, increased 1.1 percent year on year in January. On a monthly basis, consumer prices edged up 0.3 percent.

The NBS attributed tempering growth to retreating food prices due to warmer weather during the period. A bigger comparison base last year, and slumping global oil prices also helped drag down the price levels.

Meanwhile, China’s producer price index (PPI), which measures wholesale inflation, plunged 4.3 percent year on year in January, marking the 35th straight month of decline that pointed to continued weak market demand.

HSBC chief China economist Qu Hongbin said the weaker than expected inflation data showed China’s deflationary pressure was on rise.