China’s Inflation Rate Cools To A 29-Month Low

Consumer prices rose 2.2 percent over a year earlier, down from May’s 3 percent, government data showed Monday. Food costs rose 3.8 percent.

Lower inflation clears the way for Beijing to cut interest rates or boost spending to reverse China’s deepest slump since the 2008 global crisis with less danger of igniting a spike in politically sensitive living costs.

Premier Wen Jiabao warned over the weekend that the world’s second-largest economy still faces “huge pressure” to decelerate. That suggested Beijing might roll out more stimulus measures following two rate cuts since the start of June, a reduction in gasoline prices and higher public works spending.

The slowdown and measures to fight it could have global repercussions if they disrupt Chinese demand for imported oil, iron ore and consumer goods from the United States, Europe and other struggling economies.