China's inflation rate rose at its slowest pace in nine months in November, kept in check by lower price rises for food and easing the pressure for further interest rate hikes, data showed yesterday.
The National Bureau of Statistics said the Consumer Price Index (CPI) for last month was up 2.8 percent year-on-year, compared with 4.3 percent in October and 3.0 percent in November last year.
The figure was the lowest rate since February and was down sharply on gains of 5.2 percent in September and 5.3 percent in both August and July.
"It is a sign that government policies are gradually having an effect but, having said that, it is too early for the government to claim victory in the fight against overheating," said Qu Hongbin, an economist at HSBC.
Analysts said the sharper-than-expected slowdown means there is less pressure on policy makers to raise interest rates again following a 27 basis points hike to 5.58 percent in October -- the first rise in nearly a decade.
Also working in the govern-ment's favor, figures on Thursday showed industrial output growth last month eased to 14.8 percent year-on-year, its slowest pace in 18 months.
"With the recent ease in inflation, any further tightening measures, either administrative or a rate hike, will be off the table in the near term," Goldman Sachs economist Hong Liang (
Analysts said the slowdown reflected a significant drop in food prices, which rose 5.9 percent last month compared with a gain of 10 percent gain in October and more than 13 percent in September. Notably, fresh vegetables fell 14.4 percent.
However, Morgan Stanley chief China and Asia economist Andy Xie (謝國忠) warned that it was too early to conclude that the economy was slowing.
"The CPI is still very strong ... the economy hasn't slowed down," he said.
While CPI was easing, factory gate price data suggested there could be strong inflation pressures still coming through the system.
Qu noted the same point, saying investment was still going strong and producer prices still running ahead fast.
Producer prices rose 8.1 percent year-on-year last month, mainly due to strong growth in raw material and fuel prices, the NBS said. The was slower than the 8.4 percent gain in October but that had been the fastest increase since at least 1998.
For the 11 months to November, CPI was up 4.0 percent, compared with 1.0 percent in the same period last year and 4.1 percent in the first 10 months of this year.