China Inflation

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China: Inflation slows to almost five-year low in September

October 15, 2014

In September, consumer prices rose 0.5% over the previous month, which followed the 0.2% increase recorded in August. The monthly increase mainly reflected higher prices for clothing, recreation, education and culture as well as for food.

Annual inflation fell from August’s 2.0% to 1.6% in September. The print undershot the 1.7% that market analysts had expected and represented the lowest rate since January 2010. Consequently, the trend now points downward, with annual average inflation declining from 2.5% in August to 2.3% in September.

Meanwhile, the producer price index fell 1.8% in September over the same month last year (August: -1.2% year-on-year), which marked the lowest rate in five months. Moreover, the print exceeded the 1.6% decline that market analysts had expected. As a result, the annual average variation of the producer price index inched down from minus 1.5% in August to minus 1.6% in September.

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 that was set in 2013. FocusEconomics Consensus Forecast participants expect that inflation will average 2.4% in 2014, which is unchanged from last month’s estimate. In 2015, the panel sees inflation inching up to 2.8%.


Author: Ricard Torné, Lead Economist

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China Inflation Chart


China Inflation September 2014

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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