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China’s CPI Growth Continues to Slow Down

Economic Information Daily reported that the anticipated growth of the Consumer Price Index (CPI) in October will reach a new low of 1.4 percent. It is likely that the 1.6 percent growth earlier, which was the new low for the last 56 months, had not bottomed out. Estimates for the CPI growth for October came in at 1.4 percent. Analysts believe that the consecutive decline in the CPI monthly growth is indicative of the deepening pressure from the deflation in the world economy. The sharp slowdown in the CPI and PPI growth requires further relaxation of China’s monetary policy.

“We cannot supply a simple explanation of the decline using numbers alone. The real problem is that the factors causing the decline are very complex, including expansionary macroeconomic policies, rising costs amid economic growth, dependence on foreign raw materials, and other factors. These factors are structural and deep-rooted. They cannot be resolved using short-term macroeconomic policy.” 

Source: Economic Information Daily reprinted by Xinhua, November 7, 2014