China Inflation Rate At 3-Month High Of 1.2% In April


China's consumer prices rose 1.2 percent year-on-year in April of 2017, following a 0.9 percent rise in March and slightly above market consensus of a 1.1 percent gain. It was the highest inflation rate since January, as cost of non-food rose at a faster pace and cost of food fell less than in a month earlier.

In April, the politically sensitive food prices declined by 3.5 percent (from -4.4 percent in the prior month) while non-food cost rose 2.4 percent (from 2.3 percent). Cost of consumer goods went up 0.2 percent (from - 0.1 percent) and those of services increased by 2.9 percent (from 2.7 percent).

Among food, prices rose markedly for fresh fruits (5.9 percent from 3.0 percent). In contrast, prices fell for: pork (-8.1 percent from -3.2 percent from -0.9 percent), fresh vegetables (-21.6 percent from -27.9 percent), eggs (-11.4 percent from -11.8 percent) and tobacco (-0.2 percent from -0.2 percent). Prices were unchanged for milk (from -0.2 percent). 

For non-food categories, cost went up more than in the preceding month for: household goods and services (0.8 percent from 0.7 percent); education, culture & recreation (2.6 percent from 2.3 percent), healthcare (5.7 percent from 5.3 percent) and other goods and services (3.4 percent from 2.9 percent). Prices went up at a slower pace for: transport & communication (1.8 percent from 2.0 percent). Inflation was steady for: clothing (1.3 percent) and rent, fuel & utilities (2.4 percent).

On a monthly basis, consumer prices went up 0.1 percent, after declining 0.3 percent in a month earlier while market estimated a flat reading.

The producer prices index rose 6.4 percent year-on-year in April, compared to a 7.6 percent rise in March and slightly below consensus of 6.9 percent. It was the eighth straight month of increase but the weakest since December 2016. Cost went up at slower pace for most categories: means of production (8.4 percent from 10.1 percent in the prior month, namely extraction: 28.3 percent, raw materials: 13 percent and processing: 5.2 percent); consumer goods (0.7 percent, the same as in March, namely food production: 0.5 percent, clothing: 1.5 percent and general daily goods: 1.4 percent). In contrast, prices of consumer durables declined by 0.1 percent, following a 0.4 percent drop in March. On a monthly basis, producer prices fell 0.4 percent, the first drop since June 2016, due to a fall in iron and steel smelting and processing.

Statistics China | Rida Husna | rida@tradingeconomics.com
5/10/2017 9:44:38 AM