China Inflation October 2019


China: Inflation climbs to nearly eight-year high in October on surging pork prices

November 9, 2019

Consumer prices rose 0.9% in October, matching September’s result. The print mostly reflected higher prices for food, particularly owing to a continued surge in pork prices following the outbreak of African swine fever in August 2018 which has reduced the country’s pork herd by approximately 40% according to official figures. Pork prices have jumped around 100% in the last 12 months.

Inflation shot up from 3.0% in September to 3.8% in October. The print was above market analysts’ expectations of 3.3% and the highest rate since January 2012. Annual average inflation rose from 2.4% in September to 2.5% in October.

Annual producer prices (PPI), meanwhile, fell 1.6% year-on-year. The print exceeded both September’s 1.2% decline and the 1.5% drop that market analysts had expected.

FocusEconomics Consensus Forecast participants expect that consumer inflation will average 2.4% in 2020, which is up 0.1 percentage points from last month’s estimate, and 2.3% in 2021. Meanwhile, the panel expects producer inflation to be 0.7% in 2020, which is unchanged from last month’s projection, and 1.5% in 2021.

Author: Ricard Torné, Lead Economist

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China Inflation Chart

China Inflation October 2019 1

Note: Annual and monthly variation of consumer price index and annual variation of producer price index in %.
Source: National Bureau of Statistics of China (NBS).

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