China's November price gain weaker than expected; deflation risk rises
Beijing
CHINA's annual consumer inflation eased to a five-year low of 1.4 per cent in November, signalling persistent weakness in the world's second-largest economy and giving policymakers more room to ease policy to support growth. Beijing is increasingly concerned about the risk an onset of deflation would pose to an economic recovery that has failed to gain traction despite a swath of reform initiatives intended to restore investor confidence and re-spark productive business investment. Analysts had expected annual consumer inflation to be 1.6 per cent in November, the same as in October.
The consumer price index fell 0.2 per cent in November from October, the National Bureau of Statistics said on Wednesday. The market had expected prices to be flat. As in previous months, rising food prices did not offset underperformance in non-food items; tobacco and liquor prices dragged as China continued to purge corrupt officials, and transport and communication prices also dropped - partly the result of falling global oil prices.
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