China Inflation

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China: Inflation slows in June

July 9, 2014

In June, consumer prices fell 0.1% over the previous month, which contrasted the 0.1% increase recorded in May. The monthly decline mainly reflected lower prices for food.

Annual inflation fell from 2.5% in May to 2.3% in June. The print slightly undershot the 2.4% that market analysts had expected. As a result, the trend now points downward, with annual average inflation inching down from the previous month’s 2.6% to 2.5% in June.

Meanwhile, the producer price index fell 1.1% over the same month last year in June (May: -1.4% year-on-year), which marked the highest level since April 2012. That said, the print exceeded the 1.0% drop that market analysts had expected. As a result, the annual average variation of the producer price index inched up from minus 1.8% in May to minus 1.7% in June, which marked the highest rate since November 2012.

At China’s annual National People’s Congress that was held in early March, Prime Minister Li Keqiang set a target rate of 3.5% for 2014 consumer price inflation, which is the same goal as was set in 2013. FocusEconomics Consensus Forecast participants expect that inflation will average 2.8% in 2014, which is down 0.1 percentage points from last month’s estimate. In 2015, the panel sees inflation inching up to 3.1%.


Author: Ricard Torné, Head of Economic Research

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China Inflation Chart


China Inflation June 2014 0

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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