China Inflation Rate Edges Up to 1.8% in December


China's consumer prices rose by 1.8 percent year-on-year in December of 2017, after a 1.7 percent rise in November and slightly below market consensus of a 1.9 percent gain. Cost of non-food continued to increase, while cost of food fell much less.

In December, the politically sensitive food prices declined by 0.4 percent (from -1.1 percent in the prior month), while non-food cost rose 2.4 percent (from 2.5 percent). Cost of consumer goods went up 1.1 percent (from 0.9 percent) and those of services increased by 3.0 percent (from 3.1 percent). 

Among food, prices dropped for: pork (-8.3 percent from -9.0 percent), and fresh vegetables (-8.6 percent from -9.5 percent). In contrast, prices rose for: eggs (11.4 percent from 5.6 percent); milk (0.6 percent from 0.4 percent), and fresh fruits (6.3 percent from 5.7 percent). Meantime, prices of tobacco were flat for the second straight month. 

For non-food categories, prices increased at a faster pace for: clothing (1.3 percent from 1.2 percent in November); household goods and services (1.6 percent from 1.5 percent); education, culture & recreation (2.1 percent from 2.0 percent), and other goods and services (1.9 percent from 1.7 percent). Meantime, cost went up less for: transport and communication (1.2 percent from 1.3 percent), and healthcare (6.6 percent from 7.0 percent), while inflation was steady for: rent, fuel & utilities (2.8 percent).

On a monthly basis, consumer prices rose 0.3 percent, following a flat reading in a month earlier, while markets estimated a 0.4 percent rise. 

The producer price index increased by 4.9 percent from a year earlier in December of 2017, compared to a 5.8 percent rise in the prior month while markets estimated a 4.8 percent gain. It was the 16th straight month of rise in producer prices but the least since November 2016. Cost rose less for means of production (6.4 percent from 7.5 percent in November, namely extraction: 9.1 percent, raw materials: 8.1 percent and processing: 5.5 percent). Also,  prices rose at softer pace for consumer goods (0.5 percent from 0.6 percent, namely food production: 0.2 percent, clothing: 0.6 percent and daily use goods: 1.6 percent). At the same time, prices of consumer durable goods declined by 0.2 percent (after a flat reading in the prior five months). On a monthly basis, producer prices rose 0.8 percent, compared to a 0.5 percent gain in November.

China Inflation Rate Edges Up to 1.8% in December


Statistics China | Rida Husna | rida@tradingeconomics.com
1/10/2018 1:50:35 PM