China's inflation rises to 5-month high of 2.5 per cent in May on pickup in food costs

BEIJING, China – China’s inflation rose to a five-month high of 2.5 per cent in May, driven by higher food prices, government data showed Tuesday.

Inflation still is 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.

May inflation was up from the previous month’s 1.8 per cent, boosted by a 4.1 per cent rise in food prices.

“We don’t expect inflation to get out of hand this year,” said Julian Evans-Pritchard of Capital Economics in a report.

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.