China Inflation Rate at 3-Month Low of 1.4% in July


China's consumer prices rose 1.4 percent year-on-year in July of 2017, following a 1.5 percent rise in June while market expected a 1.5 percent gain. It was the lowest inflation rate since April, as cost of non-food slowed and cost of food continued to fall.

In July, the politically sensitive food prices declined by 1.1 percent (from -1.2 percent in the prior month) while non-food cost rose 2.0 percent (from 2.2 percent). Cost of consumer goods went up 0.5 percent (from 0.6 percent) and those of services increased by 2.9 percent (from 3.0 percent). 

Among food, prices fell for: pork (-15.5 percent from -16.7 percent), eggs (-4.9 percent from -9.3 percent) and tobacco (-0.1 percent from -0.2 percent). In contrast, prices rose for: fresh fruits (1.7 percent from 9.9 percent), milk (0.3 percent from 0.1 percent) and fresh vegetables (9.1 percent from 5.8 percent). 

For non-food categories, cost rose at a slower pace for: healthcare (5.5 percent from 5.7 percent) and other goods and services (1.3 percent from 2.8 percent). Inflation was steady for clothing (1.4 percent); household goods and services (1.1 percent); rent, fuel & utilities (2.5 percent) and education, culture & recreation (2.5 percent). On the other hand, cost of transport & communication declined by 0.2 percent (from 0.1 percent).

On a monthly basis, consumer prices edged up 0.1 percent, after declining 0.2 percent in a month earlier and slightly below estimates of a 0.2 percent rise. 

The producer price index increased by 5.5 percent from a year earlier, the same in the preceding two months. The figure was in line with estimates and marking the eleventh straight month of increase in producer prices. Inflation was steady for: means of production (7.3 percent, namely extraction: 15.8 percent, raw materials: 9.3 percent and processing: 5.8 percent); consumer goods (0.5 percent, namely food production: 0.4 percent, clothing: 1.2 percent and daily use goods: 0.6 percent). Meanwhile, prices of consumer durable goods were unchanged, after gaining 0.1 percent in June. On a monthly basis, producer prices rose 0.2 percent and marking the first increase in four months.

Statistics China l Rida Husna | rida@tradingeconomics.com
8/9/2017 5:51:48 AM