China says inflation rate slows to 2.6% in 2012

BEIJING - China's inflation rate slowed to 2.6 per cent last year, the National Bureau of Statistics said on Friday, down sharply from 5.4 per cent the year before.

The annual inflation figure was also lower than the government's target of 4.0 per cent, signalling that prices remained well under control last year.

Inflation stood at 2.5 per cent year-on-year in December, the statistics bureau said, compared with 2.0 per cent in November.

Rising food prices, particularly for vegetables, were the major contributor to the December increase, the bureau said.

The benign inflation environment came as China's economic expansion continued to slow during the first nine months of the year, with Gross Domestic Product growth of 7.4 per cent in the three months to the end of September - the worst in more than three years.

But data for the final three months of the year, including manufacturing, broader industrial output and retail sales, have spurred optimism among economists that growth accelerated in the fourth quarter.

China releases fourth-quarter GDP figures next Friday.