CHINA’S consumer inflation fell to a five-year low of 1.4 percent in November, the government said yesterday, increasing concerns over the risk of deflation in the world’s second-largest economy.

    The news came after the central People’s Bank of China on Nov. 21 shocked markets by cutting interest rates for the first time in more than two years to kickstart the slowing economy and analysts said they expect further easing measures in the new year.

    The rise in the consumer price index is the lowest since November 2009, marking a slowdown from October’s 1.6 percent.

    The National Bureau of Statistics also said the producer price index (PPI) — a measure of costs for goods at the factory gate and a leading indicator of the trend for CPI — fell 2.7 percent year-on-year, the worst reading since a similar decline in June 2013.

    The last PPI increase was in January 2012.

    The figure was far below the government’s 2014 inflation target of 3.5 percent and economists expect inflation to remain below 2 percent in 2015, which may raise concerns of deflation and trigger more policy easing.

    Economists have been expecting further measures after last month’s rate cuts, including reductions in the reserve requirement ratio (RRR), the amount of cash banks must keep on hand. Cutting the level means more money is available for lending, which can have a stimulatory effect on the economy.(SD-Agencies)

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