China Inflation Rate At 4-Month High Of 1.5% In May


China's consumer prices rose 1.5 percent year-on-year in May of 2017, following a 1.2 percent rise in April and matching market consensus. It was the highest inflation rate since January, as cost of non-food increased further and cost of food fell much less than in a month earlier.

In May, the politically sensitive food prices declined by 1.6 percent (from -3.5 percent in the prior month) while non-food cost rose 2.3 percent (from 2.4 percent). Cost of consumer goods went up 0.7 percent (from 0.2 percent) and those of services increased by 2.9 percent (from 2.9 percent in April). 


Among food, prices rose more than in the prior month for: fresh fruits (11.8 percent from 5.9 percent) and milk (0.1 percent from a flat reading). In contrast, prices fell for: pork (-12.8 percent from -8.1 percent), fresh vegetables (-6.3 percent from -21.6 percent), eggs (-14.4 percent from -11.4 percent) and tobacco (-0.2 percent from -0.2 percent). 

For non-food categories, cost went up more than in the preceding month for: rent, fuel & utilities (2.5 percent from 2.4 percent), household goods and services (1.0 percent from 0.8 percent) and healthcare (5.9 percent from 5.7 percent). Cost increased at a slower pace for: transport & communication (1.1 percent from 1.8 percent) and other goods and services (2.9 percent from 3.4 percent). Inflation was steady for: clothing (1.3 percent) and education, culture & recreation (2.6 percent. 

On a monthly basis, consumer prices fell 0.1 percent, after gaining 0.1 percent in a month earlier while market estimated a 0.2 percent decline.

The producer price index rose 5.5 percent year-on-year, compared to a 6.4 percent rise in April and  below  market estimates  of  a 5.7 percent gain. It was the ninth straight month of increase but the weakest since December 2016. Cost went up at slower pace for most categories: means of production (7.3 percent from 8.4 percent in the prior month, namely extraction: 22.7 percent, raw materials: 11.1 percent and processing: 4.6 percent); consumer goods (0.6 percent from a flat reading, namely food production: 0.3 percent, clothing: 1.5 percent and daily use goods: 1.1 percent). Meanwhile, prices of consumer durable goods went up 0.2 percent, after declining 0.1 percent in April. On a monthly basis, producer prices fell 0.1 percent.

Statistics China | Rida Husna | rida@tradingeconomics.com
6/9/2017 10:44:33 AM