CPI eases in China to 6.3%

China’s inflation rate eased for the third consecutive month in July, giving the government more leeway to pursue policies to boost growth, economists said yesterday.

The consumer price index was at 6.3 per cent in July, easing from June’s 7.1 per cent and May’s 7.7 per cent, the National Bureau of Statistics said in its monthly release. “I think in the next few months we will further see a slowdown in inflation,” Deutsche Bank economist Jun Ma said.

The consumer price data was released a day after the government said producer prices had risen 10.0 per cent in July, the fastest rate in 12 years. Rising fuel prices played a role in last month’s inflation, with petrol prices up 22.2 per cent from a year earlier, according to the bureau.

Beijing in June lifted petrol and diesel prices by up to 18 per cent as the government moved to close the gap between state-set domestic prices and the soaring world oil market. The government also raised electricity costs.

While food prices have been the most important factor in bringing about inflation in recent months, non-food items are gradually having a bigger impact.