China inflation drops to 22-month low in November
Friday, 12 December 2008
BEIJING, Dec 11 (AFP): China's inflation rate dropped abruptly to a 22-month low of 2.4 per cent in November from 4.0 per cent in October, the government said today, as cost increases for food and other items slowed.
China began the year worried about soaring inflation due to economic overheating, but analysts said the latest data raised the spectre of possible deflation as the impact of the global slowdown grows in China.
The National Bureau of Statistics said the consumer price index for the first 11 months of the year was up 6.3 per cent over last year.
However the latest figures marked a continued price softening after CPI hit a 12-year high of 8.7 per cent in February.
Prices of food products, a key consumer concern in China, were up just 5.9 per cent in November, far less than the 20.4 per cent rate over the first half of the year.
Prices of non-food items, meanwhile, increased a paltry 0.6 per cent, with service industry costs gaining a mere 0.3 per cent and general consumer goods increasing 3.1 per cent.
Ma Qing, an analyst with research firm CEB Monitor Group in Beijing, said inflation in China would likely be negative 1.5 per cent in the coming months.
China has announced a 586-billion-dollar stimulus package aimed at boosting domestic demand, hoping to shore up the trade-dependent economy as overseas demand for Chinese exports shrivels.
The government had feverishly pulled a range of policy levers throughout 2008 to try to curb soaring inflation, which has traditionally given rise to unrest in China.
But Beijing has reversed course in recent months, slashing interest rates to try to bolster growth, as the global slowdown makes itself increasingly felt.
The inflation data was just the latest indication of economic trouble.
On Wednesday, the government announced that exports had declined 2.2 per cent to 115 billion dollars in November from the previous year, the first such decline in more than seven years.
It also reported that imports plummetted 17.9 per cent in another sign of weakening domestic demand.
China began the year worried about soaring inflation due to economic overheating, but analysts said the latest data raised the spectre of possible deflation as the impact of the global slowdown grows in China.
The National Bureau of Statistics said the consumer price index for the first 11 months of the year was up 6.3 per cent over last year.
However the latest figures marked a continued price softening after CPI hit a 12-year high of 8.7 per cent in February.
Prices of food products, a key consumer concern in China, were up just 5.9 per cent in November, far less than the 20.4 per cent rate over the first half of the year.
Prices of non-food items, meanwhile, increased a paltry 0.6 per cent, with service industry costs gaining a mere 0.3 per cent and general consumer goods increasing 3.1 per cent.
Ma Qing, an analyst with research firm CEB Monitor Group in Beijing, said inflation in China would likely be negative 1.5 per cent in the coming months.
China has announced a 586-billion-dollar stimulus package aimed at boosting domestic demand, hoping to shore up the trade-dependent economy as overseas demand for Chinese exports shrivels.
The government had feverishly pulled a range of policy levers throughout 2008 to try to curb soaring inflation, which has traditionally given rise to unrest in China.
But Beijing has reversed course in recent months, slashing interest rates to try to bolster growth, as the global slowdown makes itself increasingly felt.
The inflation data was just the latest indication of economic trouble.
On Wednesday, the government announced that exports had declined 2.2 per cent to 115 billion dollars in November from the previous year, the first such decline in more than seven years.
It also reported that imports plummetted 17.9 per cent in another sign of weakening domestic demand.