China’s Consumer Inflation Eases In Sep Even As Deflationary Pressures Build

This added on to the pressure for the government to bring in more stimulus measures to help recover flagging demand and revive the shaky economic activity

The consumer inflation in China eased out in September against expectations, while the producer price deflation deepened in the economy. This added on to the pressure for the government to bring in more stimulus measures to help recover flagging demand and revive the shaky economic activity.

On Saturday, Finance Minister Lan Foan announced that the government is launching ‘counter-cyclical measures’ this year, however, there was no details shared regarding the size of the fiscal stimulus or the timing of its implementation. Investors remained hopeful that the package would help calm down the deflationary pressures in the economy, reported Reuters.

The consumer price index (CPI) climbed 0.4 per cent from a year earlier last month, against a 0.6 per cent jump recorded in August, official data from the National Bureau of Statistics (NBS) revealed on Sunday.

The producer price index (PPI) slipped at the fastest pace in six months, slipping 2.8 per cent on a year-on-year (YoY) basis in September, in comparison to a 1.8 per cent fall logged in the previous month. 

The authorities have also ramped up their stimulus efforts recently to help boost demand and meet the target of nearly 5 per cent economic growth this year, the report noted. However, analysts stated these measures can only help provide some temporary relief to the economy and there is a dire need to work on the structural issues at a deeper level. 

Notably, the initial stimulus package was announced by the central bank in late September. Analysts and investors now remain hopeful that a meeting of the Parliament is expected to be held in the coming weeks wherein more details about the fiscal measures should be revealed.