Chinese inflation rose more than expected in November suggesting that measures taken to boost economic growth is beginning to spur domestic demand.
Consumer prices rose 1.5 percent year-on-year in November, faster than the 1.3 percent growth seen in October, as both food and non-food price inflation picked up, the National Bureau of Statistics said Wednesday.
Inflation also exceeded the expected rate of 1.4 percent. Despite the acceleration, overall inflation remains well below the government's full year target of around 3 percent.
Food prices advanced 2.3 percent after climbing 1.9 percent in the prior month. Likewise, non-food prices growth quickened to 1.1 percent from 0.9 percent.
On a monthly basis, consumer prices remained flat following a 0.3 percent drop a month ago.
The data is consistent with the assessment that domestic price pressures are on the rise and that inflation is set to rebound going into the next year, Julian Evans-Pritchard at Capital Economics, said.
Even if price pressures simply hold steady, both consumer and producer prices will still pick up markedly over the coming months, as the sharp falls in the price of oil and other commodities at the end of last year drop out of the base for comparison.
Thus far, lower inflation and weak economic growth have been providing the central bank with a conducive situation for monetary policy adjustment.
The People's Bank of China has reduced its interest rates six times since last November. The bank last cut its rates by a quarter point in October. In its attempt to achieve its 7 percent growth target, the government ramped up fiscal spending this year.
Another report from the NBS showed that producer prices decreased for 45 consecutive months in November. The producer price index slid 5.9 percent annually, the same rate of decline as seen in October. Economists had forecast a 6 percent fall for November.
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