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China inflation eases to 2.5 percent in December

Jan. 8, 2014 at 10:54 PM   |   Comments

BEIJING, Jan. 8 (UPI) -- China's inflation fell to 2.5 percent in December from 3 percent in November and 3.2 percent in October, the National Bureau of Statistics announced Thursday.

For all of 2013, the consumer price index, China's main gauge of inflation, rose 2.6 percent from 2012, but was far below the government's target of 3.5 percent for 2013.

Food prices, which account for a third of the CPI index, have been the main reason for the fluctuations in the CPI.

With inflation remaining well under control, the country's policymakers should have more flexibility to implement long-awaited financial reforms even as they try to keep growth going.

China's economic growth had been slowing last year as indicated by the latest data such as the purchasing managers' index both in manufacturing and non-manufacturing.

The PMI for the manufacturing sector, a key measure of factory output, fell to 51 percent in December from November's 51.4 percent, the first such decline since June. Any number over 50 on the PMI index denotes expansion while any number below that denotes contraction.

Similarly, the PMI for the non-manufacturing sector, which measures business activity in the services sector, fell to a four-month low at 54.6 in December as most industries sought to find new growth engines amid slowing exports.

Final official data for the fourth quarter and for all of last year, including gross domestic product growth, industrial production, retail sales and fixed-asset investment, will be released later this month.

China's GDP in the first nine months of last year grew 7.7 percent year-on-year.

China's Cabinet in a recent report presented to China's Parliament said the country's economic growth for all of 2013 is likely to stand at 7.6 percent, which would be the weakest performance since 1999.

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