China’s Inflation, Growth Still Brisk Enough To Forestall Easing

Inflation was down in October for the third month in a row, with the Consumer Price Index coming in at 5.5% year-on-year, a full percentage point below July’s peak but still well above the official target of 4.0%. GDP growth also remains well in excess of the official target of 7%, topping 9% over the past three quarters. While slowing in the face of concerns about sluggish demand in China’s export markets, when taken in conjunction with the other continuing concern, about potential bad loans sitting on the banks’ books (and in the unofficial banking sector), growth remains robust enough for policymakers to refrain from any easing for now.