CHINA’S red-hot factory-gate inflation cooled slightly in November from a 26-year high, driven by a government move on runaway commodity prices and an easing power crunch and providing more room for policymakers to support the economy.

The producer price index rose 12.9 percent in November, the National Bureau of Statistics said Thursday, slower than October’s 26-year high of 13.5 percent. The consumer price index increased 2.3 percent, the fastest pace since August 2020 but below the projected 2.5 percent gain.

While factory inflation remains uncomfortably high, the price moderation may give policymakers some latitude to unleash more stimulus to shore up flagging growth.

The slowdown is a sign that the government’s efforts to tame soaring commodity prices and deal with power shortages over the past few months are having an effect.

China’s economy, which staged an impressive rebound from last year’s pandemic slump, has lost momentum in recent months as it grapples with surging prices, a slowing manufacturing sector, debt problems in the property market and persistent COVID-19 outbreaks.

The People’s Bank of China on Monday announced a cut to the amount of cash that banks must hold in reserve, its second such move this year, to bolster slowing growth.

Factory-gate inflation has sped up since May this year due to soaring commodity prices, piling pressures on downstream businesses to pass on their costs to consumers.

Authorities have rolled out a series of interventions in recent months, including setting an immediate ex-mine price target and ordering rapid production to cool red-hot prices, measures that have proven effective in easing a power shortage expected this winter. (SD-Agencies)