Chinese Inflation Remains Subdued in November
China’s inflation rate dropped slightly in November, Reuters reports. Inflation in China came in at 3 percent last month, down a fraction from October’s 3.2 percent. Many economists had expressed fears over rising inflation in China after a spike earlier this year that sent rates above 3 percent, a manifestation of the central bank’s fiscal stimulus from over the summer.
However, as policies have tightened, it appears as if November’s data reflect the beginning of a turnaround that could give the Chinese government more room to maneuver moving into 2014.
Leading the way in the inflation drop were food prices, which declined after posting several months of sharp increases earlier this year, according to Reuters. Producer prices continued to fall year over year, though they were virtually unchanged from October. Producer prices have been falling on an annual basis for nearly two years in China.
Concerns over inflation rates will only become serious if levels hit above 3.5 percent. Many economists believe that pressures on inflation rates will remain in the coming months unless monetary policy is seriously changed in China, which is unlikely to happen. This means that rates stable around 3 percent could become the norm in the country, at least until late in 2014.