China Inflation January 2022


China: Inflation drops to lowest level since September 2021 in January

February 16, 2022

Consumer prices increased 0.40% over the previous month in January, swinging from the 0.30% fall seen in December.

Consumer price inflation dropped to 0.9% in January below December’s 1.5%. January's result represented the weakest inflation rate since September 2021. Meanwhile, the trend pointed up mildly, with annual average inflation coming in at 1.0% in January (December: 0.9%). Lastly, producer inflation fell to 9.1% in January, from the previous month's 10.3%.

Consumer price inflation is forecast to average higher than its current level in 2022. In contrast, producer price inflation should ease this year, amid a high base of comparison and a stabilization of commodity prices.

Commenting on the Inflationarry outlook, Ting Lu, Jing Wang and Harrington Zhang, economists at Nomura, said:

“With a high base, contracting demand and Beijing’s efforts to tame runaway energy and raw materials prices, we expect PPI inflation to fall to 8.6% yoy in February. For CPI inflation, in view of weakening demand, lower food prices after the LNY holiday and the different timing of the LNY holiday, we expect a moderation to 0.7% yoy […] Taking into account the surge in global energy and raw materials prices over the past two months […], we revise our 2022 annual CPI and PPI inflation to 2.0% and 4.2%, respectively, from 2.4% and 3.5%.”

FocusEconomics panelists forecast that consumer price inflation will average 2.2% in 2022, which is unchanged from last month’s estimate, and 2.2% in 2023. Producer price inflation is forecast to average 3.6% in 2022, which is up 0.3 percentage points from last month’s forecast, and 1.1% in 2023.


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