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China's CPI growth slows to 1.8% in July
Published on: 2012-08-09
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China's consumer prices increased 1.8 percent in July year on year, the slowest pace since February 2010, the National Bureau of Statistics (NBS) announced Thursday.
 
The Consumer Price Index (CPI), the main gauge of inflation, was 0.4 percentage points lower than the figure in June.
 
The easing inflation is explained as a result of the base effect. The CPI growth rate hit a 37-month high of 6.5 percent in July last year before gradually retreating as China's economy slowed for eight quarters in a row.
 
Food prices, which account for nearly one-third of the weighting in the calculation of China's CPI, edged up 2.4 percent in July from a year ago, down from a growth of 3.8 percent in June.
 
Food prices were mainly driven by an eight percent hike of vegetable prices, as rain and flooding affected vegetable production in many places in a traditionally peak season of supply.
 

China has already started to boost the economy by lowering interest rates and cutting banks' reserve requirement ratios this year. Analysts noted that more pro-growth measures may be pushed forward in the coming months to counter weak external demand.
 

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