Tuesday 12 August 2008


CHINA INFLATION COOLS, ALLOWING MORE GROWTH MEASURES

Kevin Hamlin and Nipa Piboontanasawat

Aug. 12 (Bloomberg) -- China's inflation cooled to the slowest pace in 10 months, giving the government more room to restrain the yuan's advance and bolster economic growth.

Consumer prices rose 6.3 percent in July from a year earlier as food costs eased, the statistics bureau said today, after a 7.1 percent gain in June. That was below the 6.5 percent median estimate of 17 economists surveyed by Bloomberg News.

The slowdown may encourage government policies aimed at sustaining growth in the world's fourth-biggest economy rather than fighting inflation. While policy makers have halted the yuan's appreciation and boosted tax rebates to help exporters, data yesterday showing the fastest producer-price inflation in 12 years underscores the risk that consumer prices will rebound.

“The headline number looks good but price pressures in the pipeline mean it's not all good news,'' said Kevin Lai, an economist at Daiwa Institute of Research in Hong Kong. “Round one is probably over, but it is still too early to claim a gold medal over inflation fighting.''

The yuan weakened 0.1 percent to 6.8626 against the dollar as of 2:56 p.m. in Shanghai. The CSI 300 Index fell 0.6 percent after sliding 5.2 percent yesterday on concern that producer- price gains will erode profits and prompt monetary tightening.

(...) [artículo aquí]

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