China inflation level remains modest

[yuiyoshida]

A fruit vendor gestures to customers next to signs showing prices of fruits at a market in Beijing on Monday.

BEIJING (Reuters) — China’s consumer inflation remained modest in April, while producer prices’ four-year slump moderated as commodity prices rebounded, easing concerns about deflationary risks to the world’s second-largest economy.

But analysts disagreed on whether the price trends alone are compelling enough for the central bank to shift to a more cautious stance on interest rate cuts just yet, after lowering them six times since late 2014.

Strong March data had raised hopes the economy was bottoming out from a prolonged slump — possibly allowing the People’s Bank of China (PBC) to take its foot off the gas — but mixed April data so far and surging debt levels have fueled doubts about whether any recovery will prove sustainable.

“With regards to monetary policy, we do not expect inflation to play a large part in the central bank’s thinking,” said Chester Liaw an economist at Forecast in Singapore.

“Inflation prints are not too high to dissuade them from further easing if need be, and not too low to warrant loosening.”

http://the-japan-news.com/news/article/0002936356

[Mutant456]

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