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Consumer inflation in China slowed to a minimum in 18 months
And there is also a fall in producer prices, and this gives the government more opportunity to mitigate monetary policy in the event that economic growth continues to decline.
The consumer price index rose by 1,8% in annual terms in April, according to the National Bureau of Statistics.
Economists surveyed by Bloomberg expected inflation at the level of 2,1%, while in March the figure was 2,4%. Producer prices fell 2%, and this decline remains 26-th consecutive month.
New data also suggests that domestic demand remains "subdued" and that falling commodity prices are exacerbated by overcapacity in some industries.
The absence of inflationary pressure will allow the People’s Bank of China to ease monetary policy to support the economy, since the target for GDP growth at the level of 7,5% is under threat.
Analysts expect the economy to grow 7,3% this year, the weakest growth in China in 24 years.
Inflation remains significantly below the target value of the government in 3,5%.
Due to the fact that the risks of deflation have grown, and in conditions of low economic growth, the regulator can achieve a reduction in loan rates for Chinese enterprises.