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China inflation rises to 2.5% year-on-year in May: govt

BEIJING - China's annual inflation rose sharply to 2.5 per cent in May, official data showed Tuesday, accelerating from 1.8 per cent in April and marking the highest figure in four months.

The country’s consumer price index -- a main gauge of inflation -- also increased by 2.3 pe rcent in the first five months of the year from the same period in 2013, the National Bureau of Statistics said in a statement.

The May figure was the highest since a similar reading in January, and matched the forecast of 2.5 percent in a poll of economists by the Dow Jones Newswires.

Despite the rebound in May, CPI was still well below the 3.5 percent annual target set by Beijing in March.

But it may ease some worries on deflation risks in the Chinese economy, a key driver of world growth.

Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, but economists say falling prices encourage consumers to put off spending and companies to delay investment, both of which act as brakes on growth.

AFP


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