China Inflation Rate Slows to 4-Month Low of 2.2% in November


China's consumer price inflation slowed to 4-month low of 2.2 percent year-on-year in November 2018 from 2.5 percent in the previous month and below market consensus of 2.4 percent. Food inflation hit its lowest in three months and cost of non-food increased the least in seven months.

For 2018, the Chinese government targets inflation to be around 3 percent. 

The politically sensitive food inflation eased to 3-month low of 2.5 percent from a 7-month high of 3.3 percent in October, as prices rose at a softer pace for fresh vegetables (1.5 percent vs 10.1 percent) and eggs (6.4 percent vs 8.5 percent). Meanwhile cost continued to fall for edible oil (-0.6 percent, the same as in October) and pork (-1.1 percent vs -1.3 percent). At the same time, cost of fresh fruits increased at a faster 13.3 percent (vs 11.5 percent).

Cost of non-food rose at a slower 2.1 percent, following a 2.4 percent increase in October and marking the lowest gain in 7 months. Prices eased for rent, fuel and utilities (2.4 percent vs 2.5 percent); and transport and communication (1.6 percent vs 3.2 percent), while inflation was steady for clothing (at 1.4 percent, the same as in October); education, culture and recreation (at 2.5 percent); household goods & services (at 1.5 percent); and healthcare (at 2.6 percent). On the other hand, cost increased faster for other goods and services (1.5 percent vs 1.3 percent). 

Annual core inflation, which excludes volatile items such as food and energy, stood at 1.8 percent in November, unchanged from the previous month.

On a monthly basis, consumer prices declined by 0.3 percent in November, compared with market expectations of a 0.1 percent fall and after a 0.2 percent gain in a month earlier. It marked the first monthly drop in consumer prices since June.

Meantime, the producer price index in China increased by 2.7 percent from a year earlier in November, after a 3.3 percent rise in the previous month and matching market expectations. It was the lowest producer inflation since October 2016, as prices of means of production went up at a softer 3.3 percent (vs 4.2 percent in October), namely raw materials (4.6 percent vs 6.7 percent), processing (2.2 percent vs 2.5 percent), and extraction (9.2 percent vs 12.4 percent). Meanwhile, consumer goods inflation edged up to 0.8 percent from 0.7 percent, of which food production (1.1 percent vs 0.9 percent), clothing (1.5 percent vs 1.2 percent) and daily use goods (0.8 percent vs 1.0 percent). Cost of consumer durable goods went up 0.1 percent (vs -0.1 percent in October). On a monthly basis, producer prices fell 0.2 percent, following a 0.4 percent rise in October.

China Inflation Rate Slows to 4-Month Low of 2.2% in November


National Bureau of Statistics of China l Rida | rida@tradingeconomics.com
12/10/2018 12:42:13 PM