China Inflation January 2016

China

China: Inflation hits five-month high in January

February 18, 2016

In January, consumer prices were up 0.5% over the previous month, which matched the result tallied in the previous month. The reading mainly reflected much higher prices for food as a result of soaring prices for fresh vegetable ahead of the Chinese New Year.

Inflation rose from December’s 1.6% to 1.8% in January, which represented the highest reading since August 2015. The print slightly undershot the 1.9% that market analysts had expected. The trend picked-up in January, with annual average inflation inching up from last month’s 1.4% to 1.5%.

Meanwhile, the producer price index fell 5.3% in January over the same month last year, which was above December’s 5.9% decline. The print was better than the 5.4% drop that market analysts had expected. The annual average variation of the producer price index decreased from minus 5.2% in December to minus 5.3% in January, which represented the lowest value since December 2009.

FocusEconomics Consensus Forecast participants expect that inflation will average 1.6% in 2016, which is down 0.1 percentage points from last month’s estimate. In 2017, the panel sees inflation edging up to 1.8%. Meanwhile, the panel expects producer prices to decline 3.4% in 2016, which is down 0.2 percentage points from last month’s projection. In 2017, panelists see producer prices falling 1.7%.


Author: Ricard Torné, Lead Economist

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China Inflation Chart


China Inflation January 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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