Agencies
China’s consumer inflation unexpectedly eased in September, while producer price deflation deepened, heightening pressure on Beijing to roll out more stimulus measures quickly to revive flagging demand and shaky economic activity.
Finance Minister Lan Foan told a news conference on Saturday there will be more “counter-cyclical measures” this year, but officials did not provide details on the size or timing of fiscal stimulus being prepared, which investors hope will ease deflationary pressures in the world’s second-largest economy.
The consumer price index (CPI) rose 0.4 percent from a year earlier last month, the slowest in three months, against a 0.6 percent rise in August, data from the National Bureau of Statistics (NBS) showed on Sunday, missing a 0.6 percent increase forecast in a Reuters poll of economists.
The producer price index (PPI) fell at the fastest pace in six months, down 2.8 percent year-on-year in September, versus a 1.8 percent decline the previous month and below an expected 2.5 percent decline.
“China faces persistent deflationary pressure due to weak domestic demand. The change of fiscal policy stance as indicated by the press conference yesterday (Saturday) would help to deal with such problems,” said Zhiwei Zhang, Chief Economist at Pinpoint Asset Management.
Chinese authorities have stepped up stimulus efforts in recent weeks to spur demand and help meet an around 5.0 percent economic growth target for this year, though some analysts say the moves may only offer temporary relief and stronger measures are needed soon or the weakness could extend well into next year.
