Econintersect: The CPI (Consumer Price Index) for China was 1.9% higher than a year ago in September, slightly lower than August's reading of 2.0% and slightly higher than July's 1.8%. The PPI (Producer Price Index) for finished manufactured goods declined 3.6% year-over-year. This was only slightly below the -3.5% number for August but was the seventh month in a row of PPI deflation. The last time that PPI was positive was January when it registered +0.7% year-over-year. These inflation numbers were probably not imagined by many in the middle of 2011 when CPI hit 6.5% and PPI was at 7.5%.
Other Chinese economic news had export growth firming but import growth at an unusually low level. Over the week-end China announced that September exports were up 9.9% year-over-year, but import growth was only 2.4%. Both numbers were much stronger than August when exports were up only 2.7% and imports declined by 2.6%.
Some quotes from the Financial Times:
“Today’s inflation data, together with some forward-looking activity data, suggest the slack in the economy remains large,” said Liu Ligang of ANZ.
Lu Ting of Bank of America Merrill Lynch said: “Muted inflation pressure will provide more room for the government to introduce additional policy easing and stimulus measures.”
- Chinese inflation steadies at 1.9% (Simon Rabinovtch, Financial Times, 15 October 2012)
- China: Exports Drop, Imports Edge Up (GEI News, 10 September 2012)
- China Exports: Economy Continues to Soften (GEI News, 10 August 2012)
- China: Prices Falling Off a Cliff, Trade Balance Unexpectedly Positive (GEI News , 10 July 2012)