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