China: Inflation moderates in April
May 11, 2012
In April, consumer prices added 3.4% over the same month last year, which was below the 3.6% increase registered in March but came in line with market expectations. Owing to the softer rise, annual average inflation edged down from 5.1% in March to 4.9% in April. The deceleration observed in April was broad-based, particularly in food prices. Meanwhile, core inflation, which strips out volatile food costs, inched down from 1.8% in March to 1.7% in April, thereby marking the lowest level recorded since October 2010. Meanwhile, on 9 May, the National Development and Reform Commission (NDRC) announced a 3.5% reduction in gasoline and diesel prices, effective on 10 May. The NDRC cut prices for the first time since October 2011 on the back of falling global oil prices. The producer price index fell 0.7% over the same month last year in April, following the 0.3% drop observed in March. The reading represents the lowest rate since November 2009 when the country last experienced producer price deflation. As a result, annual average producer price inflation continued to slow for a sixth month in a row, falling from March's 4.3% to 3.7%. The government expects that inflation will average 4.0% this year.