China Inflation Rate Slows to 2.1% in March


China's consumer price inflation fell to 2.1 percent year-on-year in March 2018 from a four-and-a-half-year high of 2.9 percent in the previous month and below market consensus of 2.6 percent. Cost increased at a softer pace for both food and non-food products.

The politically sensitive food inflation eased to 2.1 percent in March from 4.4 percent in the previous month, as prices increased at a slower rate for fresh vegetables (8.8 percent from 17.7 percent), fresh fruits (7.4 percent from 8.7 percent) and eggs (17.6 percent from 22.5 percent); while those of pork fell further (-12 percent from -7.3 percent). Meanwhile, cost continued to increase for milk (0.7 percent from 0.4 percent) and tobacco (0.1 percent from 0.1 percent).

Cost of non-food products rose at a softer 2.1 percent, following a 2.5 percent advance in February. Prices increased less for: household goods and services (1.6 percent from 1.8 percent); transport and communication (0.3 percent from 1.5 percent); education, culture & recreation (2.2 percent from 3.7 percent); healthcare (5.7 percent from 6 percent) and other goods and services (1.2 percent from 1.7 percent). Meantime, inflation was steady for clothing (at 1.1 percent) and rent, fuel & utilities (at 2.2 percent).

On a monthly basis, consumer prices declined by 1.1 percent in March, following a 1.2 percent rise in February and way above market expectations of a 0.5 percent fall. It was the first monthly drop since last June.

Meanwhile, the producer price index increased by 3.1 percent from a year earlier in March, easing from a 3.7 percent advance in the prior month and missing market expectations of 3.2 percent. It was the lowest producer inflation since October 2016, as cost of means of production rose at a softer pace (4.1 percent from 4.8 percent in February), namely extraction (5 percent from 6.4 percent), raw materials (5.1 percent from 5.9 percent) and processing (3.7 percent from 4.2 percent). Also, consumer goods inflation eased to 0.2 percent in March from 0.3 percent in the previous month, due to a slowdown in daily use goods (0.9 percent from 1.1 percent) and clothing (0.3 percent from 0.5 percent) and a decline in consumer durable goods (-0.3 percent from -0.1 percent). Food production prices were unchanged for the third consecutive month. On a monthly basis, producer prices fell by 0.2 percent in March, following a 0.1 percent drop in February.


 China Inflation Rate Slows to 2.1% in March


Statistics China l Rida Husna | rida@tradingeconomics.com
4/11/2018 10:43:48 AM