China: Consumer price inflation comes in at highest level since September 2020 in October; producer price inflation surges
November 10, 2021
Consumer prices increased 0.70% over the previous month in October, following a flat reading in September. October's figure marked the highest reading since January.
Consumer inflation came in at 1.5% in October, which was up from September’s 0.7%. October's figure was the highest inflation rate since September 2020. Meanwhile, the trend pointed up mildly, with annual average inflation coming in at 0.6% in October (September: 0.5%). Finally, producer price inflation rose to 13.5% in October, from September’s 10.7%, amid elevated raw material and energy prices, and marking a multi-decade high. Both consumer and producer inflation readings were above market expectations in October.
Consumer prices are likely to rise further heading into 2022, as the base effect for pork prices becomes tougher and some pass-through from producer prices occurs. Producer price inflation should ease next year, amid a high base of comparison, an easing of supply constraints and a recent raft of measures to curb domestic coal prices.