China Inflation August 2017

China

China: Inflation increases in August

September 8, 2017

In August, consumer prices rose 0.4% from the previous month, up from July’s 0.1% increase. The reading mainly reflected higher prices for food, tobacco and liquor. Prices of fresh vegetables, part of that sub-component, notably rose by 8.5% compared to July. On the other hand, prices for clothing, and education, culture and recreation fell in August from July.

Inflation rose from July’s 1.4% to 1.8% in August, overshooting the 1.6% market analysts had expected. As with the month-on-month increase in consumer prices, the rise in the price of fresh vegetables drove the inflation reading for August. Annual average inflation, meanwhile, rose from July’s 1.6% to 1.7% in August.

Producer inflation came in at 6.3% in August (July: 5.5%), overshooting market analysts’ expectations of 5.6%. Annual average producer inflation rose from July’s 4.5% to 5.1% in August, marking the highest reading since January 2012.

The government set an inflation target of 3.0% for 2017. FocusEconomics Consensus Forecast participants expect that consumer inflation will average 1.8% in 2017. In 2018, the panel sees consumer inflation at 2.2%, which is unchanged from last month’s estimate. Meanwhile, the panel expects producer inflation to be 5.0% in 2017. In 2018, panelists see producer inflation at 0.8%, which is down 0.2 percentage points from last month.


Author:, Economist

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China Inflation August 2017 1

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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