* China November CPI scheduled for release at 0130 GMT
* Reuters poll consensus is rise of 4.4 percent y/y
* Reuters poll forecasts Nov PPI slowed to 3.3 pct y/y
* Weaker inflation gives central bank room to loosen
* Other data due include industrial output, retail sales
By Lucy Hornby
BEIJING, Dec 9 (Reuters) - China's annual inflation rate likely dropped in November to within sight of the government's official target, fuelling expectations of further monetary policy easing to combat deteriorating domestic and international economic conditions.
Data on inflation, industrial output, retail sales and other economic indicators are due to be released on Friday.
"Inflation likely fell to 4.4 percent in November, and may stay at 4 to 5 percent for the next few months," economists at Citi wrote in a note to clients. "More policy easing is expected with accumulating evidence of economic weakness."
That view chimes with the consensus forecast that the data will show China's annual rate of consumer price inflation slowed to 4.4 percent in November from October's 5.5 percent and well below July's 6.5 percent -- a three-year peak.
Most of the 22 economists quoted in the benchmark Reuters poll clustered their forecasts in a tight range of 4.2-4.6 percent.
Inflation running well above the government's official 4 percent target for 2011 had forced Chinese planners to keep monetary policy tight, even as evidence grew that the real economy -- especially private businesses that create most new jobs -- was being starved of credit at affordable rates.
But moderating inflation, as well as easing money supply pressure, allowed the People's Bank of China on the last day of November to cut the ratio of reserves banks must hold, a clear signal of a policy shift after a two-year tightening campaign.
It was the first RRR cut in three years.
Inflation rates will help determine how much room the central bank has to further cut reserve rates and unleash up to 16 trillion yuan tied up in the banking system.
"The real question is what's happening with inflation. If it remains relatively high and they can't open those reserves as much as they'd like to, then we start pushing up the liquidity constraints in the banking system," said Charlene Chu, of Fitch Ratings in Beijing.
China's government -- which ultimately sets monetary policy -- is constrained by inflation as rising prices have a history of spurring social unrest. A big injection of cash could easily reignite sharp price rises.
Other data due out will likely also demonstrate a slowing domestic economy, which bodes ill for China's efforts to turn to its home market as European and American demand for its exports weaken.
The consensus estimate is that retail sales growth weakened to 16.9 percent from 17.2 percent in October and 18.7 percent annual growth a year ago.
Industrial production growth likely also slowed, to 12.8 percent from a year earlier from more than 13 percent in data the month before. The country's official purchasing managers' index showed that factory activity in November shrank from October.
As fewer factories competed for raw materials, the rise in input costs also eased, providing cold comfort for those still operating. The economists surveyed expected producer price inflation to weaken to 3.3 percent from 5 percent in October and 6 percent in November of 2010.
The expected softening in producer price pressures comes despite stronger oil prices, which are about 15 percent higher in dollar terms now than they were a year ago. That implies that the energy component in inflation will stay firm.
By contrast, the price of iron ore, a commodity whose value has been primarily driven by China's gargantuan demand for steel over the past decade, is down by over 20 percent compared with a year ago.