China Inflation July 2016


China: Inflation hits six-month low in July

August 9, 2016

In July, consumer prices rose 0.2% over the previous month, which contrasted the 0.1% decrease tallied in June. The reading, which marked a five-month high, mainly reflected higher prices for fresh vegetables and education as well as for other articles and services.

Inflation edged down from June’s 1.9% to 1.8% in July, which was in line with market expectations. The print represented the lowest reading since January 2016. Inflation is still well below the government’s 3% ceiling for the year. Annual average growth in consumer prices stabilized at June’s 1.9% in July.

Meanwhile, the producer price index fell 1.7% in July over the same month last year, which represented the slowest year-on-year decline in 23 months. The print was above both June’s 2.6% decline and the 2.0% drop that the markets had expected. The annual average variation of the producer price index inched up from June’s minus 4.9% to minus 4.6% in July.

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 Chart

China Inflation July 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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