China's economy shows no sign of deflation, according to data released on Friday by China's central bank, the People's Bank of China (PBOC).

PBOC said that M2, the broad measure of money supply, grew 18 percent year-on-year in October, which is 0.1 percentage points higher than the previous month.

Meanwhile, M1, or the narrow measure of money supply, rose by 12.1 percent year-on-year, or 0.5 percentage points higher than September.

Peng Xingyun, an analyst at the Finance Department of the Chinese Academy of Social Sciences, explained that the central bank data revealed that China's economy is growing steadily and there is no sign of deflation.

By the end of October, money in circulation went up 9 percent, or 0.5 percentage points higher than the previous month, the bank said.

Statistics from the National Bureau of Statistics on Friday also indicate that October's consumer price index (CPI) rose 1.2 percent from the same month last year, up 0.4 percent from the previous month.

The central bank said that by the end of October, outstanding yuan-denominated loans stood at 19.12 trillion yuan (2.36 trillion US dollars) at all financial institutions, up 13.8 percent on a yearly basis. The growth, which remained at the same level of the previous month, was 0.5 percentage points higher than a year ago.

Yuan deposits rose by 19 percent to 28.15 trillion yuan (3.47 trillion dollars) by the end of last month, it said.

China has set up a 15-percent target for money supply growth in 2005 to fuel its booming economy on the one hand and rein in the growth of overheated sectors on the other.

Source: Xinhua