Inflation in China slows further in September

Beijing

DEFLATIONARY pressures continued to mount in China in September, with the consumer price index (CPI) rising less than expected, and the producer price index (PPI) falling for the 44th consecutive month.

The CPI rose by 1.6 per cent last month, down from 2 per cent in August; the official target is 3 per cent.

The main drag on prices was the lower-than-expected food inflation, which was at 2.7 per cent last month, against 3.7 per cent in August.

Ling Ji, China economist with HSBC, said after the release of the figures that the data points to persistent deflation pressures in China's economy, and that prolonged weak inflation will not only weigh on firms' profits and add to their debt burden, but will also depress market expectations of incomes and prices. This may in turn exacerba…