Producer Price Index in China Moderated from 26 Year High

China’s factory inflation slowed down in November from 26 year high which would allow policymakers more room to support the economy.

According to then data of Bureau of Statistics on Thursday, the producer price index rose 12.9% from a year earlier which is above market forecast of 12.1%.

However, the consumer price index increased 2.3% which saw increasing a accelerated rate since August 2020. The market forecast was 2.5%.

The slowdown shows effectiveness of government’s effort to tame soaring commodity prices and rationing of power. If price pressure continues to ease it would provide the central bank to add more stimulus into the economy.

Meanwhile the central bank released 1.2 trillion yuan into the economy and on Monday announced the move would reduce most bank’s reserve requirement ratio by 0.5 percentage point.