China Inflation

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China: Inflation stabilizes at low levels in October

November 9, 2014

In October, consumer prices were flat over the previous month, which followed the 0.5% increase recorded in September. The monthly reading reflected that lower prices for food, transportation and communications were offset by higher prices in most of the remaining categories.

Annual inflation stabilized at the previous month’s 1.6% in October. The print was in line with market analysts’ expectations and remained at the lowest rate since January 2010. Consequently, the trend continues to point downward, with annual average inflation inching down from 2.3% in September to 2.2% in October.

Meanwhile, the producer price index fell 2.2% in October over the same month last year (September: -1.8% year-on-year), which marked the lowest rate in seven months. Moreover, the print exceeded the 2.0% decline that market analysts had expected. The annual average variation of the producer price stabilized at the previous month’s minus 1.6% in October.

At China’s annual National People’s Congress held in early March, Prime Minister Li Keqiang set a target rate of 3.5% for 2014 consumer price inflation, which is the same as the 2013 goal. FocusEconomics Consensus Forecast participants expect that inflation will average 2.3% in 2014, which is down 0.1 percentage points from last month’s estimate. In 2015, the panel sees inflation edging up to 2.8%, which is unchanged over the previous month’s projection. Meanwhile, the panel expects producer prices to decline 1.4% in 2014. Next year, panelists see producer prices falling 0.5%.


Author: Ricard Torné, Lead Economist

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China Inflation Chart


China Inflation October 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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