China Inflation Drops to 1.8 Percent in April

China’s inflation eased in April, giving the government more leeway if needed to stimulate the slowing economy.

Consumer prices rose 1.8 percent over a year earlier, down from March’s 2.4 percent increase, data showed Friday. The rise in politically sensitive food prices eased to 2.3 percent from the previous month’s 4.1 percent.

Lower inflation gives Beijing more room for interest rate cuts or other moves to stimulate the economy after growth declined to 7.4 percent in the latest quarter.

In a sign of concern over possible job losses, Beijing launched a mini-stimulus in March based on higher spending on building railways and other public works but leaders have so far ruled out bigger efforts.

Producer prices, measured as goods leave the factory, declined by 2 percent from a year earlier, compared with March’s 2.3 percent decline. Producer prices have fallen steadily for two years, reflecting weak demand and excess production capacity that has triggered price-cutting wars.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza