BEIJING (dpa-AFX) - Although China's inflation is likely to stay low in the near-term, it will not enter a deflationary spiral, economists at Capital Economics said.
Data released over the weekend showed that consumer prices declined the most in three years in November due to the deepening of food price deflation.
Consumer prices were down 0.5 percent on year, following a 0.2 percent drop in October, the National Bureau of Statistics reported. At the same time, core inflation that excludes food and fuel prices, held steady at 0.6 percent in November.
Producer prices slid 3.0 percent on a yearly basis in November after a 2.6 percent drop a month ago, the NBS showed.
Economists at Capital Economics said core inflation is likely to climb in the first half of next year with the recent step up in policy support on course to boost domestic demand and push up services inflation.
Moreover, they noted that food and energy price deflation is set to alleviate soon due to shifting base effects.
They forecast consumer price inflation to rise to an average 1.0 percent next year from an estimated 0.3 percent so far this year.
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