China Consumer Prices Drop More Than Forecast; PPI Continues To Fall
(RTTNews) - China's consumer prices declined more than expected in September on weaker domestic demand and oversupply, and producer prices remained in deflationary pressures for the 36th straight month, highlighting the persistent deflationary pressure.
Consumer prices dropped 0.3 percent on a yearly basis in September, the National Bureau of Statistics reported Wednesday.
The decline eased marginally from 0.4 percent decrease posted in August but it was slightly worse than the expected drop of 0.2 percent.
On a monthly basis, consumer prices edged up 0.1 percent after staying flat in August. Prices were forecast to climb 0.2 percent.
Core inflation that excludes prices of food and energy rose to a 19-month high of 1.0 percent in September.
Food prices eased 4.4 percent from a year ago. However, non-food prices picked up 0.7 percent after a 0.1 percent fall.
Another report showed that producer prices declined for the 36th straight month in September. Prices slid 2.3 percent year-on-year but slower than the 2.9 percent decline in August.
Considering the slowing momentum in the third quarter, another month of deflation suggests that monetary policy easing remains on the table, ING economist Lynn Song said.
Although data supports further monetary easing, the People's Bank of China could choose to wait until after a potential Xi-Trump meeting to hold easing in reserve in case talks go poorly, the economist added.
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