China's inflation slows to 6.1% in September

2011-10-14 14:27:42

China's consumer price index rose 6.1 per cent in September from a year earlier, the government said Friday, slowing marginally from an annual rise of 6.2 per cent in August.

Stubbornly high inflation persisted despite moves to rein in soaring food and housing prices, which Beijing fears could cause social unrest. Inflation hit a more than three-year high of 6.5 per cent in July.

China has already implemented a number of policies over the past year to try to slow the rise in prices, including restricting the amount of money banks can lend and hiking interest rates five times since October last year.

But the slight slowdown in inflation in September is unlikely to convince the government to loosen its tight credit policy in the short-term, analysts said.

"Tightening of monetary policy and growth moderation have ensured that inflation is now in retreat," Alistair Thornton, China analyst at Global Economics, said in a report.

But he added: "For the moment, we remain in policy stasis -- no more tightening, but no real loosening."

The key food component of inflation rose 13.4 per cent year-on-year in September, unchanged from the August level, the National Bureau of Statistics said in a statement.

Chinese Premier Wen Jiabao said just last month that he "cannot relax" due to soaring prices in China that have led to steep rises in the cost of food as he vowed to step up the fight against inflation.

However, the producer price index -- a measure of inflation at the wholesale level -- rose 6.5 per cent year on year in September, easing slightly from a 7.3 per cent rise in August, the bureau said.

The government had originally set a target of four percent for overall inflation in 2011, but officials have already admitted it will be difficult to keep CPI within that target.