China Inflation Rate at 20-Month High


Consumer prices in China unexpectedly rose 2.3 percent year-on-year in February of 2016, following a 1.8 percent rise in January and above market consensus of a 1.9 percent increase. It is the highest inflation rate since July 2014, as politically sensitive food prices surged 7.3 percent over the Lunar New Year holiday and cold weather while non-food cost rose at a slower 1.0 percent. Cost of consumer goods gained 2.6 percent and those of services advanced 1.8 percent.

Among food, upward prices pressure came from: fresh vegetables (+30.6 percent in February from +14.7 percent in January), meat and poultry (+15.1 percent from +10.8 percent) and tobacco (+6.3 percent from +6.5 percent). Prices of liquid milk also rose 0.1 percent, after remaining unchanged in the preceding month. Prices of pork also rose by 25.4 percent, following a 18.8 percent increase in the previous month. In contrast, downward pressure came from cost of: egg (-3.4 percent from -3.9 percent) and fresh fruits (-7.9 percent from -6.8 percent). 

For non-food categories, upward prices pressure came from: clothing (+1.6 percent from +1.9 percent) and housing (+1.3 percent from +1.4 percent), household equipment supplies and services (+0.3 percent from +0.6 percent); education, culture and entertainment (+0.9 percent from +1.7 percent),  healthcare (+2.8 percent from +2.9 percent) and other supplies and services (+0.4 percent from -0.4 percent). In contrast, downward prices pressures came from transport and communications (-1.6 percent from -1.6 percent)

On a monthly basis, consumer prices rose 1.6 percent, as compared to a 0.5 percent increase in the preceding month. It is the highest figure since February 2008.

The producer price index fell by 4.9 percent in February, slowing from a 5.3 percent drop in the previous month. The index has been in a negative territory since March 2012.


China Inflation Rate at 20-Month High


Statistics China l Rida Husna | rida@tradingeconomics.com
3/10/2016 6:01:35 AM