China’s Deflation Risk Fuels Calls for Interest Rate Cuts

(Bloomberg) — China’s inflation remained close to zero in May, giving the central bank scope to ease monetary policy as calls grow louder for more interest rate cuts to spur the economy’s recovery.  

The consumer price index rose 0.2% from a year earlier, the National Bureau of Statistics said Friday, in line with forecasts and up from 0.1% in April. Producer prices declined 4.6% on the back of lower commodity prices and weak domestic and foreign demand. Economists had expected a 4.3% decrease.