Investing.com - China’s producer price index and the consumer price index both grew less than median estimate in December, official data showed on Thursday in Asia.
The Producer Price Index in December, which measures price increases before they reach the consumer, was up 0.9% from a year ago, lower than the expected 1.6%, according to the latest data published by the National Bureau of Statistics.
Factory prices have now decelerated for six months in a row, the South China Morning Post reported.
The Consumer Price Index, a gauge of prices for goods and services, rose 1.9% year on year in December, compared to 2.2% in November.
The data was "consistent with evidence elsewhere of cooling domestic demand," said Julian Evans-Pritchard, senior China economist at Capital Economics.
Slower inflation will give Beijing "plenty of room to loosen (monetary) policy," said Evans-Pritchard in a note on Thursday. "If anything, cooling factory gate inflation will strengthen the case for the central bank to do more to ease financial pressure on industrial firms including by cutting benchmark lending rates," he said referring to producer inflation.
The data had limited impact on Chinese equities, as the Shanghai Composite and the SZSE Component both traded higher on Thursday.
Meanwhile, the Chinese yuan gained against the dollar, as the USD/CNY pair lost 0.4% to 6.7902.