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Inflation in China eases to its slowest pace in 14 months

December 8, 2011 |  7:39 pm

China shoe vendor

China's inflation rate slowed in November to its slowest pace in 14 months, increasing the likelihood policymakers will loosen bank lending to stimulate the country's slowing economy.

Inflation rose 4.2% from a year earlier, compared with a 5.5% rate of growth in October, China's National Bureau of Statistics said Friday.

The cooling prices provide valuable breathing room for the central government to issue targeted fiscal stimulus at a time when the country is facing falling export orders from the West and plunging real estate activity.

Last week, China's central bank lowered the required amount of money banks must hold, for the first time since December 2008.

"With the easing of inflationary pressure, policymakers will have greater leeway to carry out selective policy loosening to counter growing downside risks to growth," said Jing Ulrich, chairwoman of global markets for JP Morgan.


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-- David Pierson

Photo: A vendor drinks tea as he waits for customers at his shoe stall in Taiyuan in China's Shanxi province. Credit: Reuters.