China’s industrial output growth unexpectedly accelerated and inflation stayed below a government target, providing a boost to Communist Party leaders meeting in Beijing to chart the economy’s course for coming years.

Production rose 10.3 percent from a year earlier, the National Bureau of Statistics said Saturday, exceeding the 10 percent median estimate in a Bloomberg News survey of economists and the previous month’s 10.2 percent. Inflation was a less-than-forecast 3.2 percent and producer prices fell 1.5 percent.

The data, following an unexpectedly large jump in exports reported Nov. 8, add to a picture of an economy that is gaining strength. The improvements may bolster the confidence of President Xi Jinping and Premier Li Keqiang as they wrestle with the scale and pace of reform at a four-day meeting that state media say may be a “watershed” in the nation’s development.

“The recovery momentum is slightly stronger and more sustainable than what markets had expected and inflation is still not a threat,” said Lu Ting, head of Greater China economics at Bank of America Corp. The central bank won’t “significantly tighten monetary policies as new leaders still need a stable economic and financial environment to consolidate their power base,” he said. 

Lu said he sees “slightly more upside risk” to his fourth-quarter economic growth estimate of 7.7 percent and forecasts the increase in gross domestic product in the first half of next year could be close to 8 percent.

GDP growth rebounded to 7.8 percent in the third quarter from 7.5 percent in the previous three months. The median estimate in a Bloomberg survey of 34 economists last month was for fourth-quarter expansion of 7.6 percent.

“The government has managed to deliver stable economic data leading into the plenum driven by policy easing as evidenced by a sharp rise in total social financing” in recent months, Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong, said in a note. “As GDP growth is on track to achieve the 7.5 percent target for 2013, the political pressure to deliver good macro numbers will lessen.”

The People’s Bank of China will report October money supply, new loans and aggregate financing, its broadest measure of credit, this week. Aggregating financing, which includes bond and equity sales, entrusted loans and bankers’ acceptance bills, was probably 1.115 trillion yuan last month, according to the median estimate in a Bloomberg survey, compared with 1.4 trillion yuan in September and 1.29 trillion yuan a year earlier.

China’s top leaders started a four-day meeting in Beijing Saturday known as the third plenum that may chart out the biggest economic and societal changes to the country in a generation. Potential reforms include loosened controls on interest rates and the yuan, and closer supervision of local-government finances, according to analysts including Nomura’s Zhang.

October’s retail sales growth of 13.3 percent compared with the median projection for a 13.4 percent advance and a 13.3 percent increase the previous month. Fixed-asset investment excluding rural households in the first 10 months of the year gained 20.1 percent after a 20.2 percent increase in the first nine months. (Bloomberg)