China inflation edges up to 1.6 percent in July

“The sluggish economy in general will likely prevent any undesirable surge in inflation”.

The inflation rate rose from the previous month’s 1.4 percent, driven by a jump in pork prices. On a monthly basis, the index went down 0.7 percent in July.

China’s economic growth in the second quarter came in at 7% year-over-year-better than expected but still the slowest pace in six years.

The government has accelerated spending on infrastructure, focusing on roads, rail and subways, and offering tax breaks to businesses.

Specifically, prices of production materials fell 6.9 percent, while those of consumer goods edged down 0.3 percent.

The data showed pork price inflation was the most buoyant in July, with prices surging 16.7 percent due to a sharp fall in hog supplies.

The central People’s Bank of China (PBoC) has cut benchmark interest rates four times since November and has also loosened requirements for how much cash banks must keep on their books in a bid to boost lending and stimulate growth. The statistics bureau said that weak prices in the past discouraged farmers from raising more pigs. It said that monetary policy wouldn’t be determined by the price of a single commodity.

The slide was worse than analysts’ expectations of a 5 per cent decline.

The federal government goals to maintain shopper inflation at round three % this yr.