China’s inflation slows down in August
The country’s consumer price index increased 1.3% in August on a year to year basis after posting a 1.8% increase in July; indicating the slowest rate of inflation since October 2015 and missing economists’ forecasts calling for a rise of 1.7% in a survey conducted by Reuters. China aims to keep consumer inflation around 3% in 2016 and figures show that the rates have not exceeded this target so far.
China’s August producer price index (PPI) is down by 0.8% on a yearly basis and this has been the slowest pace of decline since April 2012.
Analysts say the positive trend in inflation figures show a stabilizing economy in China. They also noted that factory prices could soon see a recovery as the industrial sector has improved due to a housing recovery and higher commodity prices. Some expect factory prices to turn positive by the end of 2016 which could help improve earnings in the industrial sector and ease concerns over debt obligations.
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