ecns [expanded by feedex.net]: China March CPI up 2.1pct, PPI falls 1.9pct

ecns [expanded by feedex.net]

ecns

China March CPI up 2.1pct, PPI falls 1.9pct
http://www.ecns.cn/business/2013/04-09/57956.shtml
Apr 9th 2013, 07:33

2013-04-09 16:33 Caijing     Web Editor: yaolan
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China's inflation eased while deflation in producer price deepened in March, government data showed, calling for more easing policies from the central bank.


The consumer price index (CPI) rose 2.1 percent year-on-year, compared with 3.2 percenet in February while the producer price index (PPI) which gauges inflation at a wholesale level, declined to 1.9 percent from February's -1.6 percent, the National Bureau of Statistics announced today.


The significant ease in inflation is largely due to a retreat in food prices after Chinese Lunar New Year which fell in February this year. NBS data showed food costs rose 2.7 percent in March, down from 6.0 percent in the prior month.


"The much-lower-than-expected inflation figures indicate that PBOC's tightening bias will probably eased off significantly in the next two to three years," said Liu Ligang, chief China economist at ANZ, "However, we believe the PBOC will likely maintain a prudent policy stance if capital inflows are strong and property prices are rising at a fast pace."


Mr. Liu predicted inflationary pressure will remain subdued in the coming months. In addition to anemic demand pressures shown in declining PPI inflation, "the bird flu outbreak will probably decrease meat consumption in the short term".


PPI was down 1.7 percent in the first quarter, compared with the same period last year, the NBS said, reflecting the recent pullback in material prices.


"Companies' willingness to replenish inventory was dragged down by a weakening demand, while headline falling inflation has left room for the central bank for a moderate easing in monetary policies," HSBC China economist Qu Hongbin said.





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