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


China's consumer prices rose 1.5 percent year-on-year in June of 2017, the same pace as in May and matching market consensus. The inflation rate remained at its highest level since January, as cost of non-food slowed slightly while cost of food fell at a slower pace.

In June, the politically sensitive food prices declined by 1.2 percent (from -1.6 percent in the prior month) while non-food cost rose 2.2 percent (from 2.3 percent). Cost of consumer goods went up 0.6 percent (from 0.7 percent) and those of services increased by 3.0 percent (from 2.9 percent in a month earlier). 

Among food, prices rose for fresh fruits (9.9 percent from 11.8 percent) and milk (0.1 percent from 0.1 percent) and fresh vegetables (5.8 percent from -6.3 percent). In contrast, prices fell for: pork (-16.7 percent from -12.8 percent),  eggs (-9.3 percent from -14.4 percent) and tobacco (-0.2 percent from -0.2 percent). 

For non-food categories, inflation went up for clothing (1.4 percent from 1.3 percent) and household goods and services (1.1 percent from 1.0 percent); was steady for rent, fuel & utilities (2.5 percent from 2.5 percent) and eased for healthcare (5.7 percent from 5.9 percent); transport & communication (0.1 percent from 1.1 percent); education, culture & recreation (2.5 percent from 2.6 percent) and other goods and services (2.8 percent from 2.9 percent). 

On a monthly basis, consumer prices fell 0.2 percent, after declining 0.1 percent in a month earlier and marking the fastest drop since March.

The producer price index increased by 5.5 percent from a year earlier, the same in the prior month and in line with estimates. It was the tenth straight month of increase, as cost went up for all categories: means of production (7.3 percent from 7.3 percent in the prior month, namely extraction: 18.3 percent, raw materials: 10.0 percent and processing: 5.4 percent); consumer goods (0.5 percent from a 0.6 percent rise, namely food production: 0.1 percent, clothing: 1.3 percent and daily use goods: 1.0 percent). Meanwhile, prices of consumer durable goods went up 0.1 percent, after gaining 0.2 percent in May. On a monthly basis, producer prices fell 0.2 percent.

Statistics China | Rida Husna | rida@tradingeconomics.com
7/10/2017 10:22:49 AM