New updates from China's economy unveil that the country's inflation has decreased to some extent. This was noticed in the month of July and is being used by the Chinese premier Li Keqiangto trigger the economy.
Bank of America's head of Greater China economics in Hong Kong, Lu Ting said, "The muted inflation reading will provide necessary room for implementing a mini fiscal stimulus and avoiding monetary tightening. Improving investment demand and inventory restocking may help".
Figures unveil the consumer price index surged by 2.7 % in July from last year. According to the National Bureau of Statistics, this is a little less than the expected 2.8% median estimate in a Bloomberg News survey. This even falls shy of government's full-year target of 3.5%. Producer prices plunged by 2.3% after a 2.7% decrease in last month.
China economist at Barclays Plc in Hong Kong, Chang Jian, has said inflation is no big deal for the economy this year. According to him, producer price figures symbolize overcapacity in a number of industries. Rather than focusing on the vulnerability of stoking price measures, government would be stimulating growth. Inflation has become stable and is also relatively low in this period.
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