China Inflation December 2015


China: Inflation inches up in December

January 11, 2016

In December, consumer prices were up 0.5% over the previous month, which followed flat reading tallied in November. The monthly reading mainly reflected much higher prices for food as a result of soaring prices for fresh vegetables and, to a lesser extent, for fresh fruits.

Inflation rose from November 1.5% to 1.6% in November, which represented the highest reading in three months. The print was in line with what market analysts had expected. As a result, the trend was stable in December, with annual average inflation remaining at the previous month’s 1.4%. This marked, nevertheless, an over-five-year low.

Meanwhile, the producer price index fell 5.9% in December over the same month last year, which mirrored November’s decline. The print was a notch below the 5.8% drop that market analysts had expected. The annual average variation of the producer price index decreased from minus 5.0% in November to minus 5.2% in December, which represented the lowest value since December 2009.

The government set an inflation target of 4.0% for 2016. 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 December 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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