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Chinese deflation picks up speed
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| Parent(s) |
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| Contributor | kal |
| Last Edited | kal May 12, 2009 06:05am |
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| Category | General |
| Media | Newspaper - Daily Telegraph |
| News Date | Tuesday, May 12, 2009 12:00:00 PM UTC0:0 |
| Description | It was the third month of deflation in a row for the world's third-largest economy.
However, commentators said accelerating money supply, combined with an enormous surge in bank lending, meant that prices were unlikely to keep falling in the long term and would probably start rising again by the end of the year.
Both the consumer price index (CPI) and the producer price index (PPI) worsened in April, from 1.2pc and 6pc in March respectively. However, much of the current drop in prices reflects the steep spike in prices this time last year when CPI inflation was running at 8.5pc.
The fall in headline inflation was driven by tumbling food prices, with the price of pork, China's favourite meat, slumped 28.6pc as the spectre of swine flu arose. There were also price drops for consumer goods after a government-sponsored rebate programme which offered discounts on a range of items from washing machines to motorbikes to stimulate spending.
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