BEIJING: China’s consumer inflation rate crept higher in December, official data showed over the weekend, as the world’s second-largest economy struggles with slower growth.
The consumer price index (CPI)—a main gauge of inflation—rose 1.6 percent last month from a year ago, the National Bureau of Statistics (NBS) said in a statement, in line with the median forecast in a Bloomberg survey of economists.
It edged up from November’s 1.5 percent, and came in at 1.4 percent over the course of the year, well below the government’s target of “around three percent”.
Food prices, however, rose at a faster pace, increasing 2.3 percent in 2015 with particularly steep rises in pork prices.
Moderate inflation can be a boon to consumption as it pushes buyers to act before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth.
China is crucial to the global economy and concerns over slowing growth and Beijing’s management of the economy sent jitters through stock markets around the world this week.
The producer price index (PPI), which measures prices of goods at the factory gate, fell 5.9 percent year-on-year in December, unchanged from November and its 46th consecutive monthly fall.
Overcapacity in manufacturing has been a major drag on China’s growth and the protracted declines in PPI bode ill for industrial prospects.
Beijing is seeking to transition the country’s growth model away from reliance on exports and fixed-asset investment towards a consumer-driven economy, but the reform is proving bumpy.
Growth hit a 24-year low of 7.3 percent in 2014 and President Xi Jinping said late last year that annual expansion of only 6.5 percent would be enough to meet the government’s goals, the clearest signal yet Beijing will lower its growth targets for the coming years.