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China’s inflation slows to 5-year low

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China’s consumer price index fell to a five-year low in January, despite recent efforts by the nation’s central bank on policy easing. This drop in inflation now gives more scope for further easing.

The CPI inched up 0.8 percent last month from a year earlier, slower than a 1.5 percent year-over-year rise in December, data from the National Bureau of Statistics showed on Tuesday.

The rise in the inflation index was less than the median 0.9 percent gain projected by most economists. January’s inflation was the lowest since November 2009, when the CPI rose 0.6 percent.
The CPI also increased 0.3 percent in January from December. In December, it rose 0.3 percent from the preceding month.

China’s producer-price index dropped 4.3 percent in January from a year earlier, following a 3.3 percent year-over-year drop in December.

The fall in the gauge of factory-gate prices exceeded economists’ median forecast of a 3.7 percent decline.

The PPI also declined 1.1 percent in January from December. In December, it fell 0.6 percent from the preceding month.

The Australian dollar has rebounded from disappointing Chinese trade data to rise back up to 78 US cents. China is a major trading partner for Australia.

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