China Inflation January 2017


China: Inflation accelerates to nearly three-year high in January

February 14, 2017

In January, consumer prices rose 1.0% from the previous month, following December’s 0.2% increase. The reading, which marked a nearly one-year high, mainly reflected a strong increase in prices for food, tobacco and liquors, education, culture and recreation, and transportation and communication. That said, the strong increase partially reflected seasonal distortions related to the Chinese New Year holidays, which fell in late January this year.

Inflation jumped from December’s 2.1% to 2.5% in January, which marked the highest rate since May 2014. The increase was a notch above the 2.4% that market analysts had expected. Annual average inflation rose from December’s 2.0% to 2.1% in January, which marked an over two-year high.

Meanwhile, producer inflation rose from December’s 5.5% to 6.9% in January, which represented an over five-year high. The print was above the 6.5% that the markets had expected and mostly reflected higher prices for commodities and mining sectors. The annual average variation of the producer price index rose from December’s minus 1.3% to minus 0.3% in January, which represented the highest reading since August 2012.

FocusEconomics Consensus Forecast participants expect that consumer inflation will average 2.2% in 2017, which is unchanged from last month’s estimate. In 2018, the panel sees consumer inflation inching up to 2.3%. Meanwhile, the panel expects producer inflation to be 2.3% in 2017, which is unchanged from last month’s projection. In 2018, panelists see producer inflation to be 1.8%.

Author: Ricard Torné, Lead Economist

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China Inflation Chart

China Inflation January 2017

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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