Thaindian News

Beijing, Dec 9 (IANS) China’s consumer price index (CPI), a main gauge of inflation, rose 4.2 percent year-on-year in November, further weakening from 5.5 percent in October due to falling food prices, the National Bureau of Statistics (NBS) said Friday.

November’s inflation rate marked a 13-month low, according to NBS data.

On a monthly basis, the cost of living dipped 0.2 percent in November, the NBS said in a statement on its website.

“November’s reading indicates that inflation is weakening faster than I had anticipated,” said Zhang Monan, a deputy researcher with the Economic Projection Department of the State Information Center.

Before the NBS announcement, Zhang said she expected the November inflation rate to reach just below 5 percent, while many economists projected the CPI growth to fall between 4.2 percent to 4.4 percent year-on-year, reported Xinhua.

Zhang said the lower-than-expected inflation reading was a result of the country’s macroeconomic control policies, particularly the monetary tightening policies put into place in the first half of the year.

“The monetary tightening in the first half of this year had an effect (on the CPI figure),” she said, adding that a contraction in domestic and overseas demand, as well as falling commodity prices in the global market, also curbed price increases in November.

Food prices, which account for nearly one-third of the basket of goods used to calculate the CPI, went up 8.8 percent in November from a year earlier, driving up inflation by 2.7 percentage points, according to the NBS.

The carryover factor, which measures the impact of last year’s prices on year-on-year changes in this year’s prices, moderated in November and contributed only half a percentage point to November’s CPI growth, according to NBS data.

Taking the first 11 months together, the CPI rose 5.5 percent year-on-year in January-November, well above the government’s full-year inflation control target of 4 percent.
China’s CPI hit a 37-month high of 6.5 percent in July this year.

China’s Producer Price Index (PPI), a major measure of inflation at the wholesale level, rose 2.7 percent in November year-on-year, indicating subsiding inflationary pressure for December.