China Inflation


China: Inflation stabilizes at low levels in March

April 10, 2015

In March, consumer prices fell 0.5% over the previous month, which largely contrasted the 1.2% increase tallied in February. The monthly reading mainly reflected a sharp drop in prices for food as well as for recreation, education and cultural items.

Annual inflation was stable in March at the previous month’s 1.4%, which slightly overshot the 1.3% that market analysts had expected. As a result of the annual reading, the trend resumed the downward trend that was briefly interrupted in February. Annual average inflation inched down from February’s 1.8% to 1.7% in March, which marked the lowest print since July 2010.

Meanwhile, the producer price index fell 4.6% in March over the same month last year (February: -4.8 year-on-year). Moreover, the print was up from the 4.8% decline that market analysts had expected. The annual average variation of the producer price index inched down from minus 2.3% in February to minus 2.5% in March, which represented a five-year low.

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, Lead Economist

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China Inflation Chart

China Inflation March 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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