China Inflation Rate Rises to 5-Month High


China's consumer price inflation rose to 2.3 percent year-on-year in March 2019 from 1.5 percent in the previous month, in line with market consensus. This was the highest rate since October last year, mainly due to a surge in prices of food as an outbreak of African swine fever sent the price of pork soaring.

The politically sensitive food inflation rose to a 13-month high of 4.1 percent in March from 0.7 percent in the preceding month, as pork prices surged 5.1 percent, the first month of increase in over two years, after a 4.8 percent slump in February. In addition, prices of fresh vegetables jumped (16.2 percent vs 1.7 percent in February) and those of fresh fruit went up much faster (7.7 percent vs 4.8 percent); while prices continued to fall for eggs (-1.9 percent vs -4.7 percent) and edible oil (-0.4 percent vs -0.3 percent).

Cost of non-food rose 1.8 percent in March, little-changed from the previous month's 1.7 percent gain. Main upward pressure came from transport & communication (0.1 percent vs -1.2 percent), while inflation was unchanged for both clothing (at 2 percent) and education, culture & recreation (at 2.4 percent). Meanwhile, prices rose at a slower pace for: rent, fuel & utilities (2.1 percent vs 2.2 percent); household goods & services (1.2 percent vs 1.3 percent); healthcare (2.7 percent vs 2.8 percent); and other goods & services (1.9 percent vs 2 percent).

Annual core inflation, which strips out volatile food and energy prices, stood at 1.8 percent in March, the same as in February.

On a monthly basis, consumer prices fell 0.4 percent in March, after an increase of 1 percent in February and compared to market expectations of a 0.2 percent drop.

Meanwhile, China's producer price index increased by 0.4 percent from a year earlier in March, accelerating from a 0.1 percent gain in the previous month and matching market expectations. Producer inflation picked up for the first time in nine months boosted by a rebound in prices of means of production (0.3 percent vs -0.1 percent), with cost increasing faster for both processing (0.4 percent vs 0.3 percent) and extraction (4.2 percent vs 1.8 percent) and despite a further decline in prices of raw materials (-0.6 percent vs -1.5 percent). In addition, consumer goods inflation edged up to 0.5 percent from 0.4 percent, of which daily use goods (0.3 percent vs 0.2 percent), food production (1.2 percent vs 0.8 percent), and clothing (1.7 percent vs 1.6 percent), while prices dropped further for durable goods (-0.7 percent vs -0.6 percent). On a monthly basis, producer prices went up 0.1 percent in March, the first increase in five months, following a 0.1 percent drop in February.

China Inflation Rate Rises to 5-Month High


National Bureau of Statistics of China | Rida Husna | rida@tradingeconomics.com
4/11/2019 9:23:47 AM