Inflation rate moderates from three-year high in China

China's inflation rate eased from a three-year high in August as increasing food prices moderated, suggesting, further monetary tightening could be put on hold as Beijing struggled to cope with a slowing global economy.

Consumer prices in the world's second-largest economy were up 6.2 per cent against a year earlier, moderating from  6.5 per cent in July, the National Statistics Bureau said today.

It added industrial production also slowed in August, rising 13.5 per cent from the previous year, as against a 14 per cent rise in July.

While inflation was still nowhere near the government's 4-per cent target for the year,  the latest figures indicate that interest rate hikes and other measures to slow the overheated economy were taking effect, allowing China's leaders more room for policies aimed at keeping economic growth on track, as the US and European outlook worsened.

According to some analysts, softening of pressure from inflation would remove a significant barrier to further policy stimulus to respond to a slump in global demand.

Food prices, comprising a large share of the consumer price index, were up 13.4 per cent, down from 14.8 per cent in July even as a 29.3 per cent surge in prices for meat and poultry and a 12.2-per cent increase for staple grains, though, kept food price increases relatively strong.