China Inflation Rate Slows to 1.6% in September


China's consumer prices rose 1.6 percent year-on-year in September of 2017, following a 1.8 percent rise in August and in line with market consensus. The slowdown was mainly due to falling cost of food while cost of non-food continued to rise.

In September, the politically sensitive food prices declined by 1.4 percent (from -0.2 percent in the prior month) while non-food cost rose 2.4 percent (from 2.3 percent). Cost of consumer goods went up 0.7 percent (from 1.0 percent) and those of services increased by 3.3 percent (from 3.1 percent). 

Among food, prices decreased for: pork (-12.4 percent from -13.5 percent); tobacco (-0.1 percent from -0.1 percent); fresh vegetables (-1.0 percent from 9.7 percent) and fresh fruits (-3.0 percent from a flat reading in a month earlier). In contrast, prices rose for: eggs (3.7 percent from 4.3 percent) and milk (0.4 percent from 0.4 percent). 

For non-food categories, prices increased less than in the previous month for: transport and communication (0.5 percent from 0.7 percent) and education, culture & recreation (2.3 percent from 2.5 percent). Meantime, cost rose at a faster pace for: rent, fuel & utilities (2.8 percent from 2.7 percent); household goods and services (1.4 percent from 1.3 percent) and healthcare (7.6 percent from 5.9 percent). Inflation was steady for clothing (1.3 percent) and other goods and services (1.4 percent). 

On a monthly basis, consumer prices rose 0.5 percent, after gaining 0.4 percent in a month earlier and slightly above estimates a 0.4 percent rise. It was  the highest monthly figure since January.

The producer price index increased by 6.9 percent from a year earlier, compared to a 6.3 percent rise in the previous month and above estimates of a 6.3 percent gain. It was the 13th straight month of increase in producer inflation and the highest since March, as prices rose more than in a month earlier for means of production (9.1 percent from 8.3 percent, namely extraction: 17.2 percent, raw materials: 11.9 percent and processing: 7.3 percent). Also, cost of consumer goods went up slightly faster (0.7 percent (from 0.6 percent, namely food production: 0.7 percent, clothing: 1.2 percent and daily use goods: 1.3 percent). Meanwhile, prices of consumer durable goods were unchanged, the same as in the prior two months. On a monthly basis, producer prices rose 1.0 percent, compared to  a 0.9 percent gain in August.


Statistics China l Rida Husna | rida@tradingeconomics.com
10/16/2017 2:22:17 AM