China Inflation Rate in Line with Expectations


China's annual inflation rate was recorded at 1.6 percent in December of 2015, as compared to a 1.5 percent rise in the previous month and matching market consensus. The politically sensitive food prices increased by 2.7 percent while non-food cost rose at a slower 1.1 percent. Cost of consumer goods gained 1.5 percent and those of services advanced 2.1 percent.

Among food, upward prices pressure came from: fresh vegetables (+11.8 percent in December from +9.4 percent in November) and meat and poultry (+6.2 percent from +6.2 percent). Prices of pork also rose by 14.0 percent, following a 13.9 percent increase in the previous month. In contrast, downward pressure came from cost of: egg (-11.1 percent from -13.6 percent), fresh fruits (-6.9 percent from -7.2 percent) and liquid milk and dairy products (-0.5 percent from -0.7 percent).

For non-food categories, upward prices pressure came from: tobacco and liquor (+3.9 percent from +3.8 percent); clothing (+2.0 percent from +2.2 percent); household equipment and maintenance service (+0.8 percent from +0.8 percent); health care and personal (+2.5 percent from +2.6 percent); entertainment and educational products (+1.3 percent from +1.2 percent) and housing price (+0.8 percent from +0.7 percent). In contrast, prices declined for transport and communication (-1.3 percent from -1.4 percent).

On a monthly basis, consumer prices rose 0.5 percent, after remaining unchanged in November. It is the highest figure since August.

For full year of 2015, consumer prices rose 1.4 percent, well within the government's target of keeping inflation below 3.0 percent for the year. In 2014, it increased by 2.0 percent 

The producer price index fell by 5.9 percent in December from a year earlier, staying on the same level for the five months in a row. The figure is the deepest drop since September 2009.

China Inflation Rate in Line with Expectations


National Bureau of Statistics l Rida Husna | rida@tradingeconomics.com
1/9/2016 2:19:11 AM