China’s inflation rate slowed in September, government data showed on Monday, satisfying an official desire to control price gains, but highlighting overall weakness in the world’s second-largest economy.
The consumer price index rose 1.9 percent year-on-year, the National Bureau of Statistics (NBS) said, slightly down from 2.0 percent in August.
While the figure was in line with a forecast of economists by Dow Jones Newswires, the data showed producer prices – a measure of the cost of goods leaving factories, and a key indicator of price trends – fell 3.6 percent year-on-year.
That marked a seventh straight monthly contraction and follow a 3.5 percent drop in August.
China’s economy grew 7.6 percent in the second quarter through the end of June for its weakest performance in three years and the sixth straight quarter of slowing expansion.
Authorities have taken steps to boost growth by cutting interest rates twice in quick succession this year and reducing the amount of funds banks must keep in reserve to boost lending three times since December.
The government said Saturday that China’s exports rose 9.9 percent in September year-on-year to a record monthly high of $186.4 billion, but analysts said that pace was unlikely to continue at a time of global weakness.
Overall Chinese data for the third quarter has been generally disappointing, leading to expectations that gross domestic product growth may have slowed for a seventh straight quarter.
China is scheduled to announce growth figures for the three months to the end of September on Thursday.
Monday’s data, which also showed inflation at 2.8 percent in the first nine months of this year, came after the deputy chief of China’s central bank said Sunday that controlling prices “is our number one job”.
“As a central banker, we have to control inflation,” Yi Gang, deputy governor of the People’s Bank of China, told delegates at the annual meetings of the International Monetary Fund and the World Bank in Tokyo.
The price data, however, highlight persistent weakness in China’s economy, said Alistair Thornton, senior China economist at IHS Global Insight.
“Inflation data continues to point to slack demand, with industrial prices contracting at a rapid pace,” Thornton said a report after the figures were released.
“There’s no argument about it, the economy is yet to stabilise.”
But Nomura International chief China economist Zhang Zhiwei, expects inflation pressure to pick up in coming months as the economy likely rebounds in the current fourth quarter.
“The government will not likely cut interest rates, but rather lower reserve requirement ratios at banks and increase government spending on infrastructure projects to stimulate the domestic economy,” he told AFP.
Analysts have speculated that Chinese authorities have been distracted from economic matters in recent months ahead of a once-a-decade change in top leadership set to begin at a key Communist Party Congress starting November 8.
“For now, growth is crab-walking,” IHS Global Insight’s Thornton wrote. “Those looking for concrete signs of momentum and policy support will have to wait until after the Congress.”