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Low Chinese inflation fuels stimulus expectations


Low Chinese inflation fuels stimulus expectations


The latest inflation data from China shows persistent deflationary pressure – adding to expectations that more stimulus measures can be expected by the year’s end.

The consumer price index for October dipped more than anticipated, rising just 1.3 percent from a year earlier compared to 1.6 percent in September.

The producer price index fell 5.9 percent, worse than economists’ forecasts.

The problems in emerging markets such as China could hold back world growth over the next two years, according to Moody’s.

The ratings agency says it could even threaten the stability of the global economy.

It already expects China’s GDP growth to slow to just under seven percent this year, to 6.3 percent in 2016 and to only 6.1 percent in 2017.

And it warns that governments and central banks may not have the means to protect their economies from potential shocks.

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