Stability In China's Inflation Picture May Make Policy Makers More Accommodative Toward Econmomic Growth, Boosting Investor Confidence And Easing Global Economic Concerns

Monday, October 15, 2012 07:33
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Stability In China's Inflation Picture May Make Policy Makers More Accommodative Toward Econmomic Growth, Boosting Investor Confidence And Easing Global Economic Concerns

Tags: China | inflation | world economy

China faces the largest economic decline since the 2008 crisis but a tick down in inflation for the country could make policy makers more comfortable about bolstering economic growth.

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China’s economic growth during the third quarter is expected to have slipped below the 7.6% second quarter growth rate.
 
Global financial leaders have been frustrated that China has done so little to boost economic growth. China’s central bank has cut rates twice this year, leading investors to think its government was adopting a proactive focus on getting China’s economy back on track.
 
But government action stopped at that point with no further interest rate cuts and no further easing of bank reserve requirements.
 
China’s consumer price index has held at 3% since May. That may give government officials the room they are looking for to ease further. Officials at the recent IMF meeting said that China needs to send a signal to the markets that they are ready to act.
 
Much of the world economy hinges on the health of China’s economy since it is a destination for a significant portion of the world’s exports over a widely diversified slate of products.

 

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