(Corrects PPI change in bullets to -1.1 pct not -1.0)
* June consumer price index +2.3 pct vs f'cast +2.4 pct
* Producer price index -1.1 pct vs f'cast -1.0
* More government stimulus measures seen
BEIJING, July 9 China's consumer inflation
cooled slightly more than expected in June, pointing to
lingering weakness in the economy which could prompt Beijing to
launch further stimulus measures to shore up growth.
The consumer price index (CPI) rose 2.3 percent in June from
a year earlier, missing the market forecast of 2.4 percent, with
pork prices as the main drag, the National Bureau of Statistics
said on Wednesday.
The producer price index (PPI) dropped 1.1 percent in its
28-month straight fall, versus a market consensus of a fall of 1
percent, signalling that demand in the domestic economy remained
lukewarm, despite some initial signs of stabilisation seen
"The weak inflation data leaves more scope for Beijing to
step up use of targeted measures and even opens the opportunity
window for blanket easing policy, such as an interest rate cut,
to support economic growth," said Wang Jin, an analyst at Guotai
Junan Securities in Shanghai.
Asian share markets slightly extended early losses after the
inflation data, though the Australian dollar was little
The CPI fell 0.1 percent in June from May, versus a forecast
of no change in monthly prices.
In the first half of this year, average consumer inflation
was 2.3 percent, way below the official ceiling of 3.5 percent
set by the government at the start of the year.
With inflation clearly not a threat, the government and
central bank will have scope to loosen policies further to
bolster the economy if needed, without risking a potentially
destabilising spike in prices.
Chinese Premier Li Keqiang said earlier this week that
economic growth quickened in the second quarter from the
previous three months. But he added the economy still faces
downward pressure and further modest stimulus measures will
still be needed to boost activity.
The latest Reuters poll showed China's economy probably
steadied in the second quarter, with annual growth holding firm
at 7.4 percent, as a slew of government policy measures kick in.
Beijing has stepped up policy support in recent months to
give a lift to economic growth, which dipped to a 18-month low
in the first quarter.
Such measures include targeted reserve requirement cuts for
some banks, quicker fiscal disbursements and hastening
construction of railways and public housing projects.
The central bank said on Monday that it would use a mix of
various monetary tools to keep overall liquidity at an
appropriate level to support the economy.
(Reporting by Aileen Wang and Koh Gui Qing; Editing by Kim