China Inflation May 2016


Inflation softens in May on lower prices for fresh food

In May, consumer prices were down 0.5% over the previous month, which followed the 0.2% decrease tallied in April. The reading mainly reflected much lower prices for food, tobacco and alcohol, particularly for fresh vegetables.

Inflation came in at 2.0% in May. The print was below the 2.3% recorded in the previous three months and undershot the 2.2% that market analysts had expected. Despite May’s moderation, annual average growth in consumer prices inched up from 1.7% in April to 1.8%.

Meanwhile, the producer price index fell 2.8% in May over the same month last year, which represented an 18-month high. The print was above both April’s 3.4% decline and the 3.2% drop that market analysts had anticipated. The annual average variation of the producer price index edged up from April’s minus 5.2% to minus 5.0%.

FocusEconomics Consensus Forecast participants expect that inflation will average 1.7% in 2016, which is up 0.1 percentage points from last month’s estimate. In 2017, the panel sees inflation edging up to 1.9%. Meanwhile, the panel expects producer prices to decline 4.2% in 2016, which is down 0.1 percentage points from last month’s projection. In 2017, panelists see producer prices falling 2.4%.

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China Inflation Chart

China Inflation May 2016

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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