China Inflation Rate Lowest in a Year


China's consumer price inflation slowed to 1.7 percent year-on-year in January 2019 from 1.9 percent in the previous month and below market consensus of 1.9 percent. It was the lowest inflation rate since January 2018, as food prices rose at softer pace.

The politically sensitive food inflation eased to a five-month low of 1.9 percent in January from 2.5 percent in the preceding month, as prices rose at a softer pace for: fresh vegetables (3.8 percent vs 4.2 percent in December), fresh fruit (5.9 percent vs 9.4 percent) and eggs (0.3 percent vs 0.7 percent); while cost continued to fall for both edible oil (-0.3 percent vs -0.3 percent) and pork (-3.2 percent vs -1.5 percent). 

Cost of non-food rose 1.7 percent in January, the same as in a month earlier. Prices continued to increase for: clothing (1.6 percent vs 1.5 percent); rent, fuel & utilities (2.1 percent vs 2.2 percent); household goods and services (1.5 percent vs 1.4 percent); education, culture and recreation (2.9 percent vs 2.3 percent); healthcare (2.7 percent vs 2.5 percent); and other goods and services (2.3 percent vs 1.6 percent). At the same time, cost of transport and communication fell further (-1.3 percent vs -0.7 percent).

Annual core inflation, which strips out volatile food and energy prices, edged up to 1.9 percent in January, the highest since August, from 1.8 percent the previous month.

On a monthly basis, consumer prices went up 0.5 percent in January, after being unchanged in December and matching market estimates. It was the highest monthly rate in four months.

Meantime, China's producer price index increased by 0.1 percent from a year earlier in January, far slower than a 0.9 percent rise in the previous month and slightly below market expectations of 0.2 percent. It was the lowest producer inflation since September 2016, amid a slight decline in prices of means of production (-0.1 percent vs 1 percent), such as raw materials (-1.6 percent vs 0.8 percent), while inflation slowed for processing (0.3 percent vs 0.8 percent) and extraction (1.2 percent vs 3.8 percent). At the same time, consumer goods inflation edged down to 0.6 percent from 0.7 percent, of which food production (0.8 percent vs 0.9 percent), clothing (1.6 percent, the same as in December) and daily use goods (0.3 percent vs 0.4 percent). The cost of consumer durable goods was flat, following a 0.2 percent rise in December. On a monthly basis, producer prices fell 0.6 percent in January, the third straight month of decrease.

China Inflation Rate Lowest in a Year


Statistics China | Rida Husna | rida@tradingeconomics.com
2/15/2019 10:41:00 AM