Beijing, China (4E) – China posted its lowest inflation rate in a year and a half in April amid weaker economic growth, renewing calls for more aggressive stimulus to help spur the world’s second-biggest economy.
The consumer-price index (CPI) climbed 1.8 percent in April from the previous year, slightly below analysts’ projections, according to a government report released on Friday. The figure was lower compared with the 2.4 percent increase in March and the 3.5 percent inflation ceiling set by Beijing this year.
Factory gate prices fell 2 percent in April after dropping 2.3 percent in March. Producer prices have on the decline in the last 26 months, a reflection of the weakness in domestic demand for some major industrial materials.
Lower inflation is positive for consumers and provides policy makers more flexibility to implement reforms that will help loosen controls on commodities like electricity, water and oil. However, the slow pace of inflation also suggests that overall domestic demand continues to be sluggish.
The rise in consumer prices last month mostly reflected the volatile food prices that rose 2.3 percent from a year ago.