CPI falls to 1.8% in July

China’s consumer price inflation in July fell for the fourth consecutive month as the economy slowed, providing more room for policymakers to ease monetary and fiscal policy in the second half, Bloomberg reported. Consumer prices rose just 1.8% year-on-year in July, compared with 2.2% the month before. The producer price index fell 2.9% year-on-year, its fifth consecutive monthly decline. Analysts say falling inflation could allow Beijing more room to stimulate the economy, which during the second quarter grew at its slowest pace in three years, without fear of re-igniting the inflation worries that appeared last year. “Sustained policy support is needed to engineer a growth rebound in the second half,” said Ding Shuang, a Hong Kong-based economist at Citigroup. Many economists now predict further cuts in the interest rate and banks’ required reserve ratios during the second half of 2012.