China's inflation eased more than expected in October largely reflecting a slowdown in food inflation, while producer prices continued its downward trend giving room for the central bank to ease its monetary policy further.
Consumer prices rose 1.3 percent year-on-year in October, slower than the 1.6 percent increase seen in September. Inflation was forecast to slow marginally to 1.5 percent.
Inflation slowed for a second month in a row and stayed well below the government's full year target of around 3 percent.
Food inflation eased to 1.9 percent from 2.7 percent. At the same time, non-food inflation slowed marginally to 0.9 percent from 1 percent.
On a monthly basis, consumer prices fell 0.3 percent, which was the first fall in five months. Prices had increased 0.1 percent in September.
Another report from NBS showed that producer prices decreased for 44 consecutive months in October. Producer prices had fallen 5.9 percent year-on-year in October, the same rate of decline as seen a month ago and in line with expectations.
Lower inflation and weak economic growth provided the central bank with a suitable situation for monetary policy adjustment.
The People's Bank of China reduced its interest rates six times since last November. The bank last cut its rates by a quarter point in October.
China's economic growth eased slightly to 6.9 percent in the third quarter, which was below the government's target of about 7 percent.
The Organisation for Economic Co-operation and Development yesterday upgraded its China's growth forecast for this year to 6.8 percent from 6.7 percent, while it lowered the outlook for next year to 6.2 percent from 6.5 percent.
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