China's consumer inflation eases, factory-gate prices fall further

People buy vegetables and fruits at a supermarket in Lianyungang City, east China's Jiangsu Province, May 12, 2020. (File photo: Xinhua)

BEIJING, Oct. 15 (Xinhua) -- Retreating food prices eased China's consumer inflation growth in September, while factory price decline widened, official data showed Thursday.

The consumer price index (CPI), a main gauge of inflation, rose 1.7 percent year on year in September, the National Bureau of Statistics (NBS) said.

The growth eased from the 2.4-percent rise registered in August.

The CPI edged up 0.2 percent month on month in September, compared with an increase of 0.4 percent in August.

Dong Lijuan, a senior statistician with the NBS, attributed the easing CPI growth to moderating food prices, especially vegetables and pork.

Food prices, which account for nearly one-third of the weighting in the country's CPI, climbed 0.4 percent month on month in September, with the pace of growth decelerating from 1.4 percent in the previous month.

Excluding food and energy, the core CPI rose 0.5 percent year on year, a growth rate level with August, NBS data showed.

In the first nine months, China's CPI rose 3.3 percent from a year earlier, staying within the government's annual target of around 3.5 percent set for 2020.

Wen Bin, a chief analyst at China Minsheng Bank, expected the CPI growth to further moderate in the coming months because of a higher comparative base from last year, creating room for monetary policy maneuvering.

With inflation growth remaining at a reasonable level, Wen said there was less chance for the central bank to cut the benchmark interest rates and reserve requirement ratio. He expected the central bank to keep using multiple policy tools to maintain liquidity at a reasonable and sufficient level.

On Thursday, the People's Bank of China injected 500 billion yuan (74.18 billion U.S. dollars) of funds into the banking system through one-year medium-term lending facility (MLF) loans, keeping the rate on the MLF loans steady at 2.95 percent.

China has vowed to pursue a prudent monetary policy in a more flexible and appropriate way. The central bank said in its second-quarter monetary policy report that it will make monetary policy more flexible and targeted to achieve a long-term balance between stabilizing growth and preventing risks.

According to Thursday's data, the country's producer price index, which measures costs for goods at the factory gate, fell 2.1 percent year on year in September, with the decline slightly widening from the 2-percent drop in August.

Dong also said that due to price fluctuations of international crude oil, prices of oil-related industries reversed the upward trend, with prices in oil and natural gas extraction shrinking 2.3 percent last month from August, and those for the processing of oil, coal and other fuel declining 0.5 percent.

In the first three quarters, factory-gate prices were down 2 percent on average from the same period last year, according to the NBS data.