City skyline in China

China Inflation October 2020

China: Inflation drops to 11-year low in October

Consumer prices fell 0.3% over the previous month in October, contrasting September’s 0.2% increase. The print mainly reflected lower prices for food, tobacco and alcohol.

Inflation fell from September’s 1.7% to 0.5% in October. The print undershot the 0.8% result that market analysts had expected and represented the lowest reading since November 2009. Annual average inflation fell from September’s 3.6% to 3.3% in October.

Annual producer prices (PPI), meanwhile, fell 2.1% year-on-year in October. The print matched the result in September and was below the 1.9% decrease expected by market analysts.

Inflation is moderating due to a high base effect from last year when consumer prices were plagued by a surge in pork prices. In this regard, Ting Lu, Lisheng Wang and Jing Wang, economists at Nomura, comment that:

“We expect headline CPI inflation to drop further towards zero in the next several months on a still-unfavorable base effect driven by a massive rise in pork prices from end-2019 through the spring of 2020. China’s economy has been recovering and, in sequential terms, has also experienced a moderate reflation. We do not think the PBoC will react to the decline in CPI inflation data by turning more dovish but do expect Beijing to maintain its “wait and see” policy approach.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest