Wednesday, August 8, 2012

China says inflation slows to 1.8% in July

BEIJING: Chinese inflation hit a two-and-a-half-year low in July, official data showed Thursday, giving the government further policy leeway to boost weakening growth.

The country's consumer price index (CPI) rose 1.8 percent year-on-year last month, the National Bureau of Statistics said, the fourth straight month of year-on-year easing and the lowest level since January 2010.

The slowdown potentially gives authorities more ammunition to light a fire under the world's second-largest economy, which grew 7.6 percent in the second quarter.

That was China's worst performance since the height of the global economic crisis in 2008-2009.

Authorities this year have taken measures including the rare step of slashing interest rates twice in quick succession while also lowering requirements for how much money banks must keep in reserve.

Chinese leaders, including Premier Wen Jiabao, have expressed concern over the weakness in the economy and have hinted that the government may need to take further action to bolster growth.

Helping suppress the overall consumer price index was an overall decline of 0.9 percent in prices for transportation and telecommunications, according to the data.

Inflation for the first seven months of 2012 was 3.1 percent, the bureau said.

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