China inflation slows to 1.6% in September: government

[Beijing] Inflation in China fell to 1.6 per cent in September, the government said Wednesday, below analysts' forecasts and the lowest in the world's second-largest economy for almost five years.

The consumer price index (CPI) figures released by the National Bureau of Statistics represented a slowdown in inflation from 2.0 per cent in August.

It was the lowest since January 2010. Analysts polled by Dow Jones Newswires had predicted 1.7 per cent.

The figures fall well short of the 3.5 per cent annual target set by the government in March, and signal that deflationary pressures are rising.

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 weigh on growth.

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 1.8 per cent year-on-year in September, the NBS said separately.

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