Chinese inflation edged down in December, setting the stage for a continuation of cautious policy loosening to support the slowing economy.
It was the fifth consecutive month of receding inflation. However, China’s consumer price index only edged 0.1 percentage point lower from November, compared with larger 1.3 and 0.6 percentage point drops in the previous two months.
Analysts said that seasonal factors were partly to blame for the more moderate dip in inflation, as Chinese New Year falls earlier in 2012 than in recent years, fuelling a mini-spending splurge in December, which helped push up food prices.
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