Headline CPI and PPI inflation both fell further in October. But core inflation edged up and factory gate prices fell more slowly in m/m terms, a sign that recent stimulus efforts are having some effect. The near-term fiscal boost from local governments deploying existing funds should nudge up inflation further in the near-term. But unless this is followed up by a major fiscal expansion next year, the economy still faces the risk of slipping into a deflationary trap.
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