China Inflation May 2019


China: Inflation jumps to over one-year high in May

June 12, 2019

Consumer prices were flat from the previous month in May, following April’s 0.1% increase. The reading mostly reflected that higher prices for food and clothing and footwear were offset by lower prices for recreation, education and cultural services.

Inflation rose from April’s 2.5% to 2.7% in May. The print represented the highest reading in 15 months and was in line with the result that market analysts had expected. Annual average inflation inched up from April’s 2.1% to 2.2% in May.

Regarding the recent upward trend in inflation, Ting Lu, Lisheng Wang and Jing Wang, economists at Nomura, comment that:

“We believe the surge in fruit and egg prices will be short-lived and could subside in summer when supply increases, while pork prices could rise further due to a sharp decline in hog stock as a result of the spread of African Swine Fever (ASF).”

Producer price inflation (PPI), meanwhile, fell from April’s 0.9% to 0.4% in May. The reading was below market analysts’ expectations of 0.6%.

China Inflation Forecast

FocusEconomics Consensus Forecast participants expect that consumer inflation will average 2.2% in 2019, which is unchanged from last month’s estimate. In 2020, the panel also sees consumer inflation at 2.2%. Meanwhile, the panel expects producer inflation to be 1.7% in 2019, which is down 0.4 percentage points from last month’s projection. In 2020, panelists also see producer inflation at 1.7%.


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China Inflation Chart

China Inflation May 2019

Note: Annual and monthly variation of consumer price index and annual variation of producer price index in %.
Source: National Bureau of Statistics of China (NBS).

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