China Consumer Inflation Eases for Fourth Straight Month
By Bloomberg News - Aug 8, 2012
China’s inflation cooled for a fourth straight month in July, providing more room for Premier Wen Jiabao to loosen policies to stem a growth slowdown in the world’s second-biggest economy.
Consumer prices rose 1.8 percent from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 1.7 percent median forecast in a Bloomberg News survey of 33 economists and a 2.2 percent gain in June. Producer prices fell 2.9 percent from a year earlier, the fifth straight drop, the report showed.
The deceleration in price gains may encourage policy makers to introduce more measures to support growth, aiding Wen’s efforts to reverse an economic slowdown that’s lasted six quarters. Leaders of the ruling Communist Party last week pledged to keep adjusting policies to ensure stable expansion this year.
“Falling inflation is creating more room for further policy easing,” Ding Shuang, a Hong Kong-based economist with Citigroup Inc., said before the release. “Sustained policy support is needed to engineer a growth rebound in the second half.”
The People’s Bank of China may cut lenders’ reserve-requirement ratio by 50 basis points this month, the fourth reduction since November, said Ding, who previously worked for the International Monetary Fund and China’s central bank. Authorities may also lower interest rates by 25 basis points, he said. One basis point equals 0.01 percentage point.
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