- Capital Economics
China's consumer price inflation cooled further in November, falling to the lowest level in five years of 1.4% down from 1.6% a month earlier, underlying persistent weakness in the world's second biggest economy and providing policy makers with more room to easy monetary policy further to bolster growth. Measured on a monthly basis, prices dropped 0.2%, below forecast for a flat reading.
Moreover, plunging oil and metals prices have lowered costs for China's factories, leading to falling export prices and adding to dis-inflation risks across the world. The producer price inflation declined 2.7% in November from the previous year, 33rd consecutive drop and the biggest decrease since the mid last year, the National Bureau of Statistics said. The figures are the latest in a plethora of government data that indicated a deeper than expected slowdown in the Chinese economy. China's top officials started a meeting yesterday to map out economic plans for 2015. Analysts project the government to lower the 2015 economic growth target to 7% from about 7.5% this year as the economy adapts to the "new normal" of a slower growth rate. The Australian Dollar came under further pressure following negative China's data release. The Aussie lost 0.30% versus the Greenback to an intra-day low of $0.8263 shortly after the release.
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