Home Daily Blitz China’s Stabilizing Consumer Prices Leave More Room for Stimulus
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China’s Stabilizing Consumer Prices Leave More Room for Stimulus

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Shoppers look at the window display of a Gap Inc. store in Shanghai, China, on Monday, Dec. 21, 2015. China will add monetary stimulus next year, making good on a pledge to support growth as leaders push through policies to cut overcapacity and reliance on credit, according to economists surveyed by Bloomberg. Photographer: Qilai Shen/Bloomberg
Shoppers look at the window display of a Gap Inc. store in Shanghai, China, on Monday, Dec. 21, 2015. China will add monetary stimulus next year, making good on a pledge to support growth as leaders push through policies to cut overcapacity and reliance on credit, according to economists surveyed by Bloomberg. Photographer: Qilai Shen/Bloomberg

For more visit: Bloomberg News | January 8, 2016 | Bloomberg.com |

China’s consumer inflation remains muted at about half the government’s target for 2015, leaving policy makers more room to add to their record stimulus to help boost flagging growth.

The consumer price index rose 1.6 percent in December from a year earlier, the National Bureau of Statistics said Saturday. That rise, which matched economist forecasts, followed a gain of 1.5 percent in November. The producer price index fell 5.9 percent for the fifth straight month, extending declines to a record 46 months. Economists had projected a 5.8 percent decline.

"The CPI remains considerably below the government’s target of 3 percent for 2015 and is set to stay low heading into 2016," Tom Orlik, an economist at Bloomberg Intelligence in Beijing, wrote in a note. "That provides motive and opportunity for further easing."
Fresh signs of further economic weaknesses are an unwelcome signal for policy makers as the nation’s stock selloff and the depreciation of the yuan roil global financial markets. While the nation’s top leaders have vowed to support the real-estate market and reduce overcapacity this year, a protracted slowdown will make those tasks difficult to achieve.

For more visit: Bloomberg.com

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