City skyline in China

China Inflation August 2021

China: Consumer price inflation declines to lowest level since March in August

Consumer prices increased 0.10% in August over the previous month, moderating from July’s 0.30% rise. In August, lower non-food prices partially offset higher food prices

Consumer price inflation came in at 0.8% in August, which was down from July’s 1.0%. August’s result represented the lowest inflation rate since March. Accordingly, the trend pointed down slightly, with annual average inflation coming in at 0.6% in August (July: 0.7%). Finally, producer price inflation rose to 9.5% in August, from July’s 9.0%, amid elevated price pressures for raw materials and energy. This is despite government efforts in recent months to tame producer prices, such as through releasing commodities from state reserves and cracking down on hoarding.

Looking ahead, producer price inflation should stay elevated in H2 notwithstanding government measures, amid resurgent global demand and supply constraints. Regarding consumer prices, panelists see a pickup later this year, although improved pork supply due to farmers rebuilding their hog herds in the wake of African swine fever will keep a lid on the increase.

On producer prices, Ho Woei Chen, economist at United Overseas Bank, commented:

“The strong momentum and low base effect suggest that PPI inflation is likely to top out only in October. […] The government’s ‘common prosperity’ agenda, focusing on income distribution and social welfare will also strengthen the resolve to contain property price gains and as such, construction demand and thus steel prices may have room to ease.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest