China Inflation


Inflation slows to lowest level in 18 months in April

In April, consumer prices fell 0.3% over the previous month, which followed the 0.5% decrease tallied in March. The monthly drop mainly reflected lower prices for food.

Annual inflation declined from 2.4% in March to 1.8% in April, which represented the lowest rate since October 2012. The print undershot the 2.1% that market analysts had expected. As a result, the trend moved downward, with annual average inflation inching down from the previous month's 2.6% to 2.5% in April.

Meanwhile, the producer price index fell 2.0% in April over the same month last year (March: -2.3% year-on-year), which slightly exceeded the 1.9% decline that market analysts had expected. As a result, the annual average variation of the producer price index inched up from minus 2.0% in March to minus 1.9% in April.

At China's annual National People's Congress held in early March, Prime Minister Li Keqiang set a target rate for consumer price inflation of 3.5% for 2014, the same goal as in 2013. FocusEconomics Consensus Forecast participants expect that inflation will average 2.9% in 2014, which is down 0.1 percentage points from last month's estimate. In 2015, the panel sees inflation inching up to 3.1%.

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China Inflation Chart

China Inflation April 2014

Note: Year-on-year and annual average variation of consumer price index in %.
Source: National Bureau of Statistics of China (NBS).

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