Lower CPI, PPI won’t cause looser monetary policy  

经济观察：中国通胀压力缓 货币松动待思量

中国国家统计局15日发布9月份宏观经济数据。连续7个月负增长的PPI数据所彰显的企业盈利压力，让“宽松派”的学者找到了一个支持降息的理由。而CPI重新回归“1时代”，也意味着货币政策获得继续松动空间。不过，国家信息中心经济预测部主任范剑平提醒，经济筑底阶段要有一点耐心，着急放松银根，会为未来的通胀埋下隐患。

Beijing (CNS) -- The lowered consumer price index (CPI) and producer price index (PPI) released by the National Bureau of Statistics (NBS) on Monday will not make the government loosen the current monetary policy, financial experts say.

China's CPI rose 1.9 percent year-on-year in September, a slight increase on the pace of growth registered in August, when the index rose by 2.0 percent compared to 12 months earlier, the bureau said.

On average from January to September, overall consumer prices were up by 2.8 percent over the same period last year, according to NBS data.

Qu Hongbin, HSBC's chief economist for China, said that the slight increase of food prices counteracted the considerable increase of non-food prices, leading to the mild CPI data. With the increasing domestic demand, the CPI may rebound in the following months, Qu said, adding that the inflation risk may remain low as a result of the current economy and adequate food supplies.

Due to the huge impact of the periodic fluctuation of pork prices on the CPI, we should consider the time and influence of pork prices rebounding, said Ba Shusong from the Research Institute of Finance (Development Research Center of the State Council).

The NBS also said that China's PPI dropped 3.6 percent year-on-year in September, the lowest in the last three years, marking the seventh straight month of decline since March.

The PPI's continuous drop shows that pressure has increased on enterprises to make profits, and that decline in profits may continue for a while, said Ba.

Fan Jianping, director of the Economic Forecast Department of the State Information Center, said that the PPI's slight drop on a month-on-month basis should also be noted, as it can reveal the latest changes and trends better than a year-on-year basis.

Patience is needed when the economy is approaching the bottom, and loosening monetary policy in haste may lead to inflation in the future, Fan said.