China’s factory-gate prices fell for a record 32nd straight month in October and consumer inflation remained subdued, giving policymakers more room to bolster the world’s second-largest economy.
The producer-price index dropped 2.2 percent from a year earlier, the National Bureau of Statistics said in Beijing today, compared with the median projection of a 2 percent decline in a survey of analysts by Bloomberg News. Consumer prices rose 1.6 percent and the rate was unchanged from the prior month and matched economists’ estimates.
China’s economy, burdened by overcapacity and weak domestic demand, is headed for the slowest full-year growth in more than two decades. Lower prices at the factory gate typically are matched by reduced export prices, adding to deflationary pressures globally.
Eighteen of China’s 31 provinces and municipalities reported a nominal growth rate lower than the price-adjusted level for the first nine months of this year, signaling deflation. China’s imports moderated to a 4.6 percent increase in October from September’s 7 percent gain, according to data released by General Administration of Customs over the weekend.
The People’s Bank of China, which has refrained from across-the-board interest rate cuts, confirmed liquidity injections into banks in the third quarter in a report last week. It also cut the interest rate it pays lenders for 14-day repurchase agreements in September and October.
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