(ECNS) -- The country's consumer price index (CPI), a major gauge of inflation, has risen by 0.8 per cent from the same period last year, a five-year low, fuelling market hopes for further monetary easing, China News reported on Tuesday.
The producer-price index (PPI), which measures prices paid to companies, dropped 4.3 per cent year-on-year in January, the sharpest fall since late 2009, according to figures released by the National Bureau of Statistics (NBS).
Low inflation allows China's central bank more leeway for monetary policy easing. The bank can manage the market through multiple financial tools such as lowering the reserve-requirement ratio and by printing more money, said Zhao Xijun, vice chairman of the Finance Institute at Renmin University.
Domestic demand is currently weak due to the ongoing anti-corruption campaign, which means that January's CPI was consistent with market expectations, it was noted.
The rock-bottom figure could also be partly attributed to lower price growth and stable supply and demand relations during the lunar New Year Holiday, Zhao added.
Experts also attributed slowing price rises to a number of other factors such as lower transportation costs for agricultural products, lower salary rises, and the slumping global oil price.
China should make vigorous efforts to accelerate reform and encourage innovation to balance economic growth and structure adjustment, it was emphasized.
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