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China’s August inflation shows stable economy

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September 9
12:57 PM 2013

On Monday, China's August inflation data made public indicated that the country's economy showed signs of stability. This was after signs of improved export demand figures had been recorded.

The stabilized consumer inflation rate would now give the People's Bank of China some room to maneuver any shock following the announced stimulus reduction of the US Federal Reserve.  However, any sharp policy would make the world's second biggest economy move amid rising property prices, and even after the country's efforts to curtail lending. 

According to Shanghai Securities economist Jerry Hu, "There is no sign of any shift in monetary policy. I think monetary conditions will become tighter, probably through a combination of quantitative tightening and low interest rates."

According to the Bureau of National Statistics, the consumer prices in China increased by 2.6% in August last year. This was in line with market expectations and the 2.7% rise in July. Prices had been increasing per month by 0.5%, which was slightly stronger that the 0.4% forecast rise.

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