China Inflation

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China: Inflation inches up in December from November's five-year low

January 9, 2015

In December, consumer prices rose 0.3% over the previous month, which contrasted the 0.2% drop recorded in the previous month. The monthly reading, which represented the strongest increase in three months, reflected higher prices for foodstuffs as well as for medicine and medical care.

Annual inflation inched up from November’s five-year low of 1.4% to 1.5% in December. The print matched the result that market analysts had expected. Despite the slight increase in prices, the trend continues to point downward, with annual average inflation inching down from 2.1% in November to 2.0% in December.

Meanwhile, the producer price index fell 3.3% in December over the same month last year (November: -2.7% year-on-year), which marked the lowest rate since September 2012. Moreover, the print exceeded the 3.1% decline that market analysts had expected. The annual average variation of the producer price index inched down from minus 1.7% in November to minus 1.9% in December.

FocusEconomics Consensus Forecast participants expect that inflation will average 2.3% in 2015, which is down 0.2 percentage points from last month’s estimate. In 2016, the panel sees inflation edging up to 2.5%. Meanwhile, the panel expects producer prices to decline 1.0% in 2015. In 2016, panelists see producer prices rising 0.5%.


Author: Ricard Torné, Lead Economist

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China Inflation Chart


China Inflation December 2014

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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