China's factory gate inflation eases | The Daily Star
12:00 AM, December 10, 2018 / LAST MODIFIED: 12:00 AM, December 10, 2018

China's factory gate inflation eases

China's factory inflation slowed in November, a sign demand remains weak amid Beijing's ongoing trade war with the United States, while consumer inflation also flagged, official data showed Sunday.

The producer price index -- an important barometer of the industrial sector that measures the cost of goods at the factory gate -- climbed 2.7 percent on-year in November.

It ticked down from 3.3 percent the previous month, recording its weakest growth since October 2016, while remaining in line with the forecast in a Bloomberg News survey.

A slowdown in factory gate inflation reflects sluggish demand.

The consumer price index (CPI) -- a key measure of retail inflation -- rose 2.2 percent on-year, compared with 2.5 percent in October.

Food prices, up 2.5 percent, rose quicker than non-food prices, which were up 2.1 percent. Energy prices fell over the month.

"The broad moderation in inflationary pressures appears to be a reflection of weaker demand growth over the past half a year and should alleviate concerns about possible stagflation," said Goldman Sachs Economic Research in a report.

The weak figures come as China's trade war with the US continues to bite and its economy shows signs of slowing. The Asian giant recorded GDP growth of 6.5 percent in the third quarter -- its weakest in nine years.

The growth of China's trade with the rest of the world slowed last month, with exports up 5.4% and imports up 3 percent on-year -- compared with 15.6 percent and 21.4 percent respectively in October.

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