China Inflation

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China: Inflation falls to four-month low in May

June 9, 2015

In May, consumer prices fell 0.2% over the previous month, which matched the result tallied in April. The monthly reading mainly reflected a decline in prices for food and as well as for recreation, education and cultural articles.

Annual inflation declined from 1.5% in April to 1.2% in May. The print slightly undershot the 1.3% that market analysts had expected and represented a four-month low. As a result of the annual reading, the trend pointed downward in May, with annual average inflation falling from April’s 1.7% to 1.6% and marking the lowest rate since July 2010.

Meanwhile, the producer price index fell 4.6% in May over the same month last year (April: -4.6 year-on-year), which exceeded the 4.5% decline that market analysts had expected. The annual average variation of the producer price index inched down from minus 2.7% in April to minus 3.0% in May, which represented the lowest value since February 2010.

The government set an inflation target of 3.0% for 2015. FocusEconomics Consensus Forecast participants expect that inflation will average 1.9% in 2015, which is down 0.1 percentage points from last month’s estimate. In 2016, the panel sees inflation edging up to 2.2%. Meanwhile, the panel expects producer prices to decline 2.0% in 2015, which is down 0.2 percentage points from last month’s projection. In 2016, panelists see producer prices falling 0.1%.


Author: Ricard Torné, Head of Economic Research

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China Inflation Chart


China Inflation May 2015

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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