China deflation fears rise as inflation tumbles

BEIJING, May 9 (AFP) : China's annual inflation fell sharply in April to its lowest level in 18 months, official data showed Friday, raising concerns about the risk of deflation in the world's second-largest economy.
The consumer price index -- a main gauge of inflation -- went up by 1.8 per cent year-on-year last month, the National Bureau of Statistics (NBS) said in a statement, down from a rise of 2.4 per cent in March.
It was the lowest increase since October 2012, when the statistic stood at 1.7 per cent.
The April figure was also well below the 3.5 per cent annual inflation target set by Beijing and added to analyst worries that deflation could be looming as Chinese growth slows.
Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, but economists say falling prices encourage consumers to put off spending and companies to delay investment, both of which act as brakes on growth.