Weaker Inflation Gives PBOC Room For Easing

China’s consumer prices rose at their slowest rate in 13 months in February as pork prices fell by their most in over a year, a sign that slowing growth rather than rising prices poses a bigger risk to the world’s second-biggest economy.

The consumer price index rose 2 percent in February from a year earlier, the National Bureau of Statistics said on Sunday, exactly in line with market expectations. Pork prices fell 9 percent.

And in an indication that China’s wobbly economy is fighting substantial slack, producer prices fell for the 24th consecutive month by dropping 2 percent, slightly above forecasts for a 1.9 percent drop.

The tepid price data could fuel investor worries about the health of China’s economy, which drew new concerns this week after figures showed export growth slumped by nearly a fifth last month.

Some analysts say at least with inflation clearly not a threat, China will have the room to loosen policies to bolster the economy if it needs to.

CNBC

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