BEIJING - Weakening Chinese inflation could spur the government to cut interest rates and take other steps to halt a slide in economic growth.
Consumer prices rose 1.6 percent over a year earlier, driven by a 2.7 percent rise in food costs, data showed Wednesday. That was down of from August's 2 percent increase. The drop
The decline leaves room for interest rate cuts or other stimulus to prop up cooling economic growth and prevent politically dangerous job losses with less risk of igniting price rises. Beijing has cut interest rates five times since November.
Growth in the quarter ending in June held steady at 7 percent. But that was the lowest level since the 2008 financial crisis and analysts said a stock market boom pushed up activity in financial industries, masking declines in other industries.
China's slowing growth and stock market volatility this year have roiled global financial markets. The country's imports fell more than 20 percent in September, falling far short of analyst forecasts.
"Disappointing Chinese data drove another sell-off in Asia today," said Angus Nicholson at IG in Singapore. "Today's Chinese CPI essentially guaranteed further cuts to the interest rate and the reserve requirement ratio before the year is out."
He said further rate cuts this year look "inevitable" and lower rates will put renewed pressure on China to devalue its currency to help exports.