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.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu