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Wednesday, October 14, 2015, 11:12

China Sept consumer inflation eases

By Agencies

China Sept consumer inflation eases
BEIJING - Consumer inflation in China eased more than expected in September while producer prices fell for the 43rd straight month, adding to concerns over growing deflationary pressures in the world's second-largest economy.

The consumer price index (CPI) rose 1.6 percent in September from a year earlier, the National Bureau of Statistics (NBS) said on Wednesday, lower than expectations of 1.8 percent and down from August's 2.0 percent.

The producer price index (PPI) fell 5.9 percent from a year ago, in line with the expectations and the same rate of decline as in August, which was the biggest drop since the depths of the global financial crisis in 2009.

In a sign of sluggish demand, the non-food CPI was even milder with an annual growth rate of 1.0 percent in September, the NBS data showed.

The easing CPI was mainly due to a high comparison base last year, Yu Qiumei, a senior NBS statistician, said in a statement accompanying the data. CPI rose 0.5 percent month-on-month in September 2014, compared to a 0.1 percent growth last month.

Reflecting growing strains on Chinese companies from persistently weak demand and overcapacity, manufacturers continued to cut selling prices to win business.

Stubbornly weak producer prices are threatening to erode firms' profits and add to their debt burdens, conditions which analysts expect to persist for the remainder of the year.

Weichai Power, China's largest manufacturer of engines for heavy-duty trucks used in mining and construction, warned on Tuesday that its nine-month net profit could fall 75-85 percent due in part to the weakening economy.

Still, with consumer inflation remaining well below Beijing's 3 percent target for the year, policymakers have ample room to unveil further support for the economy.

China has already launched a wave of measures since late 2014, including cutting benchmark interest rates five times since November.

Trade data on Tuesday showed imports tumbled for the 11th straight month in September, weighed down by weak global commodity prices and soft demand, while exports fell for a third month, albeit less than expected.

Activity in China's factory sector shrank again in September as new orders dwindled, private and official surveys showed earlier this month.

The government is due to release September industrial output, retail sales and investment data on Monday, along with third-quarter gross domestic product (GDP).

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