China's Slowing Inflation, Output Growth Add Stimulus Pressure
Bloomberg News, ©2012 Bloomberg News
June 10 (Bloomberg) -- China's consumer prices rose the least in two years in May and industrial output and retail sales trailed estimates, adding pressure for more stimulus after the first interest-rate cut in three years.
Inflation slowed to 3 percent from a year earlier, the National Bureau of Statistics said yesterday, compared with the 3.2 percent median forecast in a Bloomberg News survey. Production increased 9.6 percent, lower than a projected 9.8 percent gain, and retail sales climbed 13.8 percent, the Beijing-based bureau said in separate statements.
The data add to concern global growth is stalling as Greece teeters on the edge of exiting the euro, Spain struggles to restore confidence in its banking system, and U.S. job growth weakens. Premier Wen Jiabao may introduce additional stimulus to protect a full-year growth target of 7.5 percent even as the nation wrestles with bad loan risks from local government debt.
"These data should defeat any remaining complacency that the policy response has been adequate to maintain steady growth," said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. "More dramatic easing, especially in housing and local government financing vehicles is urgently needed and necessary to avoid a hard landing in the Chinese economy."