DEFLATION

China’s Economic Growth Slows

Lowest rate in almost three years.

Inflation in China has reached its slowest pace in two and a half years, which could encourage the world’s second-largest economy to increase bank lending—the country’s central bank already brought down benchmark interest rates last week for the second time in under a month. “Inflation is falling fast and is likely to remain tamed for the rest of this year,” said an HSBC economist. “This leaves sufficient room for policy easing, and Beijing’s top leaders confirmed their willingness to do so.” While Beijing was once concerned with rising food prices, the current slow economic growth suggests a dip in the cost of goods, which could hurt corporations.