China Inflation August 2016

China

China: Inflation falls to 10-month low in August

September 9, 2016

In August, consumer prices rose 0.1% over the previous month, which followed the 0.2% increase in July. The reading mainly reflected that a sharp drop in prices for transport and communication was more than offset by higher prices for food, particularly fresh vegetables, and health care.

Inflation edged down from July’s 1.8% to 1.3% in August, which was well below the 1.7% that market analysts had expected. The print represented the lowest reading since October 2015. Inflation is well below the government’s 3.0% target for the year. Annual average growth in consumer prices inched down from July’s 1.9% to 1.8% in August.

Meanwhile, the producer price index fell 0.8% in August over the same month last year, which represented the slowest year-on-year decline in 52 months. The print was better than both July’s 1.7% fall and the 0.9% drop that the markets had expected. The annual average variation of the producer price index decreased from July’s minus 4.6% to minus 4.1% in August.

FocusEconomics Consensus Forecast participants expect that inflation will average 2.0% in 2016, which is unchanged from last month’s estimate. In 2017, the panel sees inflation stable at 2.0%. Meanwhile, the panel expects producer prices to decline 2.8% in 2016, which is up 0.4 percentage points from last month’s projection. In 2017, panelists see producer prices falling 1.3%.


Author:, Economist

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China Inflation August 2016 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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