China inflation eases to five-year low in November

PanARMENIAN.Net - Inflation in China eased to a five-year low in November, showing ongoing weakness in the Asian giant, BBC News reports.

The consumer price index rose to 1.4% in November from 1.6% in October, which is the lowest since November 2009.

The reading was also below market expectations of a 1.6% rise.

Producer prices, which have been entrenched in deflation, also fell more than forecast, down 2.7% from a year ago - marking a 33rd consecutive monthly decline.

Economists had predicted a fall of 2.4% after drop of 2.2% in the previous month as a cooling property market led to slowing demand for industrial goods.

The figures are the latest in a string of government data that showed a deeper-than-expected slowdown in the Chinese economy.

Dariusz Kowalczyk, economist at Credit Agricole, said the data partly reflects low commodity and food prices but also confirms softness in domestic demand.

"It will likely convince policymakers to ease their policy stance further and we continue to expect a RRR (bank reserve requirement ratio) cut in the near term, most likely this month," he was quoted by Reuters as saying.

The country's central bank unexpectedly cut interest rates for the first time in over two years last month to spur activity.

In reaction to the data, Chinese shares continued their downward trend after the Shanghai Composite fell to a five-year low on Tuesday.

The benchmark was down 1.5%, while Hong Kong's Hang Seng index fell 0.5%.