China Inflation

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China: Inflation remains low in June

July 9, 2015

In June, consumer prices were flat over the previous month, which was up from the 0.2% drop tallied in May. The monthly reading mainly reflected that a sharp increase in prices for tobacco and liquor was offset by falling prices for food, clothing and transportation.

Annual inflation rose from 1.2% in May to 1.4% in June. The print slightly overshot the 1.3% that market analysts had expected. As a result of the low inflation results tallied since mid-2014, the trend continued to point downward in June, with annual average inflation falling from May’s 1.6% to 1.5% and marking the lowest rate since June 2010.

Meanwhile, the producer price index fell 4.8% in June over the same month last year (May: -4.6 year-on-year), which exceeded the 4.6% decline that market analysts had expected. The annual average variation of the producer price index inched down from minus 3.0% in May to minus 3.3% in June, which represented the lowest value since February 2010.

The government set an inflation target of 3.0% for 2015. FocusEconomics Consensus Forecast participants expect that inflation will average 1.9% in 2015, which is down 0.1 percentage points from last month’s estimate. In 2016, the panel sees inflation edging up to 2.2%. Meanwhile, the panel expects producer prices to decline 2.0% in 2015, which is down 0.2 percentage points from last month’s projection. In 2016, panelists see producer prices falling 0.1%.


Author: Ricard Torné, Head of Economic Research

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China Inflation Chart


China Inflation June 2015

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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