China’s consumer price index fell 1.6% in September, easing slightly from 2% in September as food inflation shrank to 0.1% month-on-month, while producer prices deflated for the 43rd straight month, holding steady at 5.9% from the previous month and reflecting overcapacity in construction materials and heavy industry, The Financial Times reported. “The inflation environment in China is on the soft side, but higher food prices have boosted consumer prices lately,” said Moody’s Analytics prior to the release. “The reduced pork supply will keep food inflation elevated, but this masks the underlying disinflation dynamics. Overcapacity remains a problem and firms are pushing prices lower to drive demand.”
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