China Inflation October 2022


China: Inflation falls to lowest level since May in October

November 10, 2022

Consumer inflation came in at 2.1% in October, down from September’s 2.8% and below market expectations. October's figure marked the weakest inflation rate since May, and was the result of weak domestic demand.

Annual average inflation rose to 2.0% in October (September: 1.9%). Meanwhile, producer prices fell 1.3% on an annual basis in October, which contrasted September's 0.9% increase. The decline in producer prices was the first since December 2020, and was due to a challenging base of comparison and falls in international commodity prices.

Finally, consumer prices rose 0.10% from the previous month in October, moderating from September's 0.30% increase.

On the reading and near-term outlook, Nomura analysts said:

“Unlike the rest of the world, China printed low inflation due to weak domestic demand as a result of its zero-Covid strategy (ZCS), crashing property markets and some other sectoral policies. We expect CPI inflation to drop further to 1.8% y-o-y in November on worsening lockdowns and falling export growth, which could suppress domestic prices. PPI inflation could edge up slightly to -1.1% y-o-y in November thanks to a higher base.”

FocusEconomics panelists forecast that consumer price inflation will average 2.4% in 2023, which is up 0.1 percentage points from last month’s estimate, and 2.2% in 2024. Producer price inflation is forecast to average 0.7% in 2023, which is down 0.1 percentage points from last month’s forecast, and 1.2% in 2024.


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China Inflation Chart

China Inflation October 2022

Note: Annual and monthly variation of consumer price index, and annual variation of producer price index, in %.
Source: National Bureau of Statistics of China (NBS).

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