China's December inflation slows to 4.1pc
Friday, 13 January 2012
BEIJING, Jan 12 (AFP): Chinese inflation rose at its slowest pace in more than a year in December, official data showed Thursday, giving Beijing leeway to further ease credit restrictions to spur economic growth.
The country's consumer price index, a key gauge of inflation, rose 4.1 per cent year on year in December, the National Bureau of Statistics said in a statement, compared with 4.2 per cent in November.
For all of 2011, inflation stood at 5.4 per cent, well above the government's full-year target of four per cent and higher than the 2010 rate of 3.3 per cent, the data showed.
The December figure marked the fifth straight month that China's inflation rate has slowed since peaking at a more than three-year high of 6.5 per cent in July, as measures introduced to curb surging consumer prices took effect.
It was the lowest monthly level since September 2010 when inflation rose 3.6 per cent, but slightly higher than the 4.0 per cent rise analysts had expected, according to a Dow Jones Newswires survey.
Food prices-a key driver of inflation-rose 9.1 per cent on year in December, compared with 8.8 per cent in November, which analysts said was likely due to the unusually early Lunar New Year, which falls in January this year.
The holiday, also known as the Spring Festival, is the most important celebration on the Chinese calendar.
Retail sales typically soar ahead of the week-long break as people splash out on food, alcohol and other gifts for their families and friends.
Analysts said they expect Beijing to cut banks' reserve requirement ratio-effectively increasing the amount of money they can lend-in the coming months as authorities shift their focus to spurring economic growth amid turmoil in Europe and the United States.
"In theory, (the inflation data) should open up some more space for monetary loosening to combat slowing growth and a tumbling property market," said Ren Xianfang and Alistair Thornton, analysts at IHS Global Insight.
Growth in the producer price index (PPI), which measures the cost of goods at the farm and factory gate, also slowed to 1.7 per cent in December from 2.7 per cent in November and 5.0 per cent in October, the data showed.
The country's consumer price index, a key gauge of inflation, rose 4.1 per cent year on year in December, the National Bureau of Statistics said in a statement, compared with 4.2 per cent in November.
For all of 2011, inflation stood at 5.4 per cent, well above the government's full-year target of four per cent and higher than the 2010 rate of 3.3 per cent, the data showed.
The December figure marked the fifth straight month that China's inflation rate has slowed since peaking at a more than three-year high of 6.5 per cent in July, as measures introduced to curb surging consumer prices took effect.
It was the lowest monthly level since September 2010 when inflation rose 3.6 per cent, but slightly higher than the 4.0 per cent rise analysts had expected, according to a Dow Jones Newswires survey.
Food prices-a key driver of inflation-rose 9.1 per cent on year in December, compared with 8.8 per cent in November, which analysts said was likely due to the unusually early Lunar New Year, which falls in January this year.
The holiday, also known as the Spring Festival, is the most important celebration on the Chinese calendar.
Retail sales typically soar ahead of the week-long break as people splash out on food, alcohol and other gifts for their families and friends.
Analysts said they expect Beijing to cut banks' reserve requirement ratio-effectively increasing the amount of money they can lend-in the coming months as authorities shift their focus to spurring economic growth amid turmoil in Europe and the United States.
"In theory, (the inflation data) should open up some more space for monetary loosening to combat slowing growth and a tumbling property market," said Ren Xianfang and Alistair Thornton, analysts at IHS Global Insight.
Growth in the producer price index (PPI), which measures the cost of goods at the farm and factory gate, also slowed to 1.7 per cent in December from 2.7 per cent in November and 5.0 per cent in October, the data showed.