BUSINESS

China's inflation rises to 5-month high at 2.5 per cent

The Associated Press Published Monday, June 9, 2014 11:38PM EDT

China's manufacturing growth improves in March

An investor monitors the stock prices at a private securities company Thursday, Nov. 1, 2012 in Shanghai, China. (AP Photo)

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BEIJING -- Higher food prices have pushed China's inflation to a five-month high of 2.5 per cent.

Data released Tuesday showed consumer inflation in May picked up from the previous month's 1.8 per cent. The increase was driven by a 4.1 per cent rise in food prices.

Inflation still is well below the ruling Communist Party's 3.5 per cent target for the year, leaving room for interest rate cuts or other measures to stimulate the slowing economy if needed.

Julian Evans-Pritchard of Capital Economics says a report that he doesn't expect inflation to "get out of hand" this year.

Economic growth slowed to 7.4 per cent in the three months ended March 31 from the previous quarter's 7.7 per cent. Other indicators suggest growth might slow still further in the current quarter.