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.
Author: Luis Lopez Vivas, Economist