Inflation remains below annual target

A vendor feeds a child near a stall selling eggs in Beijing

China’s consumer price index rose 2.3 percent in July from a year earlier, well below the ruling Communist Party’s 3.5 percent target for the year.
The latest inflation rate was unchanged from June, according to data released Saturday by the National Bureau of Statistics.
The rise in the index was driven largely by higher food prices, which increased by 3.6 percent. Prices for fruits and eggs rose the fastest.
Experts expect the inflation to stay stable this year, leaving room for interest rate cuts or other measures to stimulate the economy if necessary.
“July inflation data should ease any concerns policy makers and investors may have had about rising sequential inflation amid the economic growth rebound,” Goldman Sachs Group Inc. economists led by Beijing-based Song Yu said in a note after the report. “The downward trend shown by food and non-food CPI will leave room for policy makers to maintain relatively supportive policy in the near future.”
The government’s goal is to keep consumer-price increases within about 3.5 percent this year while achieving economic growth of about 7.5 percent, Premier Li Keqiang announced in March.
Trade data released by the General Administration of Customs on Aug. 8 showed overseas shipments rose 14.5 percent in July from a year earlier and imports fell 1.6 percent. Surges in sales to the U.S. and European Union, China’s biggest markets, indicate demand from abroad will help sustain expansion. Bloomberg/AP