China Inflation

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China: Inflation accelerates in May following April's 18-month low

June 9, 2014

In May, consumer prices rose 0.1% over the previous month, which contrasted the 0.3% decrease tallied in April. The monthly increase mainly reflected higher prices for clothing and food.

Annual inflation rose from 1.8% in April—which represented the lowest rate since October 2012—to 2.5% in May. The print overshot the 2.4% that market analysts had expected. As a result, the trend moved upward, with annual average inflation inching up from the previous month’s 2.5% to 2.6% in May.

Meanwhile, the producer price index fell 1.4% over the same month last year in May (April: -2.0% year-on-year), which marked the highest level in five months. In addition, the print overshot the 1.5% drop that market analysts had expected. As a result, the annual average variation of the producer price index inched up from minus 1.9% in April to minus 1.8% in May, which marked the highest rate since December 2012.

At China’s annual National People’s Congress held in early March, Prime Minister Li Keqiang set a target rate of 3.5% for 2014 consumer price inflation, which is the same as the 2013 goal. FocusEconomics Consensus Forecast participants expect that inflation will average 2.8% 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%.


Author: Ricard Torné, Lead Economist

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China Inflation Chart


China Inflation May 2014 0

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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