China December inflation rises to 1.5%: govt

[BEIJING] China's consumer inflation rebounded marginally to 1.5 per cent year-on-year in December, the government said Friday, as slowing growth in the world's second-largest economy keeps a lid on prices.

The rise in the consumer price index released by the National Bureau of Statistics matched market estimates and marked an increase from a five-year low of 1.4 per cent in November.

For the full year 2014, consumer inflation was 2.0 per cent, down from 2.6 per cent in 2013 and well below the government's target of about 3.5 per cent.

The producer price index (PPI) - a measure of costs for goods at the factory gate and a leading indicator of the trend for CPI - fell 3.3 per cent year-on-year, the NBS said separately, a larger fall than the 3.1 per cent median forecast in a Bloomberg News survey.

It was the biggest drop since September 2012's fall of 3.6 per cent.

The last PPI increase was in January 2012, when it rose 0.7 per cent.

Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth.

AFP