November 9, China's consumer price index (CPI), the main gauge of inflation, rose 5.5% year-on-year in October, sliding for a third month, the National Bureau of Statistics (NBS) said on Wednesday.

October’s CPI growth was the slowest since May this year, and down from 6.1% in September, 6.2% in August, 6.5% in July and 6.4% in June.

Food prices, which account for nearly one-third of China’s CPI basket, added 11.9% in October on a yearly basis, but the prices were 0.2% lower month-on-month, according to the NBS.

Market watchers had predicted CPI growth of 5.4% in October.

China's CPI hit a 37-month high of 6.5% in July this year, which was far above the central government's full-year target of 4% for 2011.

China's Producer Price Index (PPI), a major measure of inflation at the wholesale level, rose 5% in October y-o-y. The rate stood at 6.5% in September.

Compared with a month earlier, October PPI was down 0.7%, according to the NBS data.

Statistics show China’s PPI climbed 6.87% y-o-y in the first 10 months of this year.

UBS Securities economist Wang Tao said the decline in October CPI was in line with market expectations as prices of pork, vegetables and food fell on stable supplies and a weakened base effect.

China’s monetary policy may be loosed in the first quarter of 2012 with slowing economic growth, enduring troubles for small and medium-sized enterprises and easing inflation, Wang added.

Source:21cbh.com