Business     

China's Oct. inflation likely to have eased

Xinhua, November 5, 2012

• Soon-to-be-released economic data will show China's inflation continued to ease in October on falling food prices, but rebounds might occur during the last two months of the year as the economy stabilizes, experts have forecast.

  Both Lu Zhengwei, chief economist at the Industrial Bank, and Li Huiyong, chief economist at Shenyin Wanguo Securities, told Xinhua that the consumer price index (CPI), a major gauge of inflation, will be seen to have expanded at 1.8 percent year on year in October.

  Lian Ping, chief economist at the Bank of Communication, projected flat CPI growth from September to October, because non-food prices have gained despite declines in food prices.

  Food prices account for a third of the weighting in the calculation of the CPI. Latest data from the Ministry of Commerce showed that the average wholesale prices of 18 staple vegetables in 36 major Chinese cities dropped 0.4 percent over the week from Oct. 22 to 28.

  According to Lu, the CPI is likely to hit the bottom in October and go upward again in November and December along with a pick-up in the country's economic growth.

  The economy has slowed to a seven-quarter low of 7.4 percent in the third quarter dragged down by lackluster external and domestic markets. But economists are widely expecting a small rebound in the fourth quarter.

  In September, the CPI increased 1.9 percent year on year, easing from a 2-percent rise in August amid government tightening measures to cap price growth, data from the National Bureau of Statistics (NBS) showed.

  The NBS is scheduled to release the CPI for October on Nov. 9.

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