Saturday, April 12, 2014

China Headed for Stagflation???

China's consumer inflation edged up in March as food prices rose despite signs the world's second-largest economy is slowing.

Consumer prices rose 2.4 percent compared with a year earlier, up from February's 2 percent rise, government data showed Friday. The increase was driven by a 4.1 percent rise in politically sensitive food costs.

Producer prices, measured as goods leave the factory, fell by 2.3 percent in a sign of weakening economic growth, the National Bureau of Statistics reported. It was their 25th straight month of decline.

Inflation still is well below the official target for the year of 3.5 percent, leaving Beijing room to stimulate the slowing economy with interest rate cuts or other measures if necessary.

China's imports shrank 11.3 percent in March in a sign of weak domestic demand while manufacturing failed to pick up as it usually does following the end of the Lunar New Year holiday.

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