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China’s inflation in August eases to 2 percent

September 11, 2014

BEIJING (AP) — China’s consumer inflation eased in August amid signs of cooling economic growth.

Prices rose 2 percent from a year earlier, down from July’s 2.3 percent increase, government data showed Thursday. Producer prices fell 0.2 percent, extending a months-long decline.

The rise in consumer prices was well below the government’s target for the year of 3.5 percent.

Trade and manufacturing have weakened recently, prompting suggestions Beijing might try to shore up economic growth. But Chinese leaders so far have ruled out a major stimulus that might add to pressure for prices to rise.

“Policymakers appear calm and have repeatedly shot down expectations for the type of across-the-board stimulus likely to stoke broader domestic price pressures,” said Julian Evans-Pritchard of Capital Economics in a report.

Inflation should remain within the government’s comfort zone and is unlikely to become a major policy issue over the coming quarters, Evans-Pritchard said.

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