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1st LD-Writethru: China's producer prices fall for 44th month

Xinhua, November 10, 2015 Adjust font size:

China's producer prices fell for the 44th straight month in October, data from the National Bureau of Statistics showed on Tuesday.

The producer price index (PPI), a measure of costs for goods at the factory gate, dropped 5.9 percent year on year, unchanged from the rate seen a month earlier.

Month on month, PPI in September edged down 0.4 percent. The index fell 5.1 percent from a year ago in the Jan.- Oct. period.

The figure will stay in negative territory for the foreseeable future as upstream industries battle over-capacity and demand for industrial goods dawdles due to structural changes in the economy, said Minsheng Securities.

Output prices of production materials fell 7.6 percent in October, contributing 5.8 percent of the PPI drop, while those of consumer goods edged down 0.4 percent during the period.

The data came along with the release of the consumer price inflation index, which rose 1.3 percent in October, slightly below the market forecast of 1.5 percent and the 1.6-percent rise in September.0 The downcast PPI and slowing CPI highlighted deflation pressure in China, Minsheng said, projecting further monetary easing policies including rates cut.

The central bank has cut the benchmark interest rates and reserve requirement ratio five times this year already.

Considering the central bank has cautioned against injecting excessive liquidity into the market, policy will operate more on the fiscal side such as adjusting the fiscal deficit, Minsheng predicted. Endit