August 11 ,2015 | by Hari Sri

Chinese inflation rates continue to rise

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The consumer inflation rate in China rose to 1.6% in July from 1.4% in June, marking the highest level this year.

The government blamed rising food prices for the increase, which is still well below the target of about 3% that it had set previously.

However, economic analysts say the latest figures highlight a need for the world's second-largest economy to take measures to stimulate growth.

 

Production values

Zhou Hao, economist at Commerzbank in Singapore, explained that: "Policy focus is definitely the [producer] deflation at this stage."

Producer prices include wholesale and factory inflation figures and they dropped for the 40th consecutive month. The producer price index has seen a 5.4% reduction year on year, 0.4% more than had been forecast.

Other factors affecting overall economic performance are a slowdown in the property market and a fall in exports. Together with a drop in investments, this all adds up to a difficult scenario for further growth.

 

Knock-on effects

As a result of the recent weak showing for the economy, China's central bank has chosen to decrease interest rates a total of four times since November 2014.

Earlier this month, figures were published that indicated that the Chinese economy had grown by 7% from April to June, an identical figure to that experienced from January to March.

Efforts to boost economic activity are currently being reflected in the movements of the Chinese stock market, which have had ramifications around the world. The Shanghai Composite, the benchmark index, has fallen by almost a third in recent weeks.

Although the situation at home may be precarious, the tough times for China's economy do not seem to be having many knock-on effects for international students taking advantage of access to education overseas.

Hari is the LSBF Blog's News Editor. He manages the editorial content on the blog and writes about current affairs, SME, entrepreneurship, energy, education and emerging market news.

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