BEIJING—China’s consumer prices last month rose at their slowest pace in more than four years, in the latest sign of weakness in the world’s second-largest economy.
The figures released on Wednesday by the National Bureau of Statistics reflect sluggish demand conditions, economists said. Higher farm yields also affected the inflation data, they said, along with declining oil prices. On Tuesday, oil prices fell 4.5% on the New York Mercantile Exchange, their biggest one-day drop in nearly two years, to $81.84 a barrel.
In a further sign of weakness, China’s producer price index—a gauge of prices at the factory gate—continued its 2½-year decline, an indication of manufacturing overcapacity. “That means that the manufacturing sector continues to struggle with a lack of pricing power, growth and demand,” said Daiwa economist Kevin Lai.
Muted price pressure gives Chinese policy makers more leeway to stimulate the Chinese economy without worrying about inflation as they search for sources of growth, although Beijing has signaled its reluctance to pursue broad-based measures that could fuel overcapacity and blunt structural reform.
The statistics agency said China’s consumer-price index climbed 1.6% in September from a year earlier, its lowest level since the 1.5% recorded in January 2010 and slower than a 2% year-on-year rise in August of this year. The inflation gauge slightly undershot the median 1.7% gain forecast by 15 economists in a Wall Street Journal survey. A government goal this year seeks to keep consumer inflation below 3.5%.