China Inflation

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China: Inflation tumbles to five-year low in November

December 10, 2014

In November, consumer prices declined 0.2% over the previous month, which followed the flat reading recorded in October. The monthly reading, which represented the steepest fall in seven months, reflected lower prices for transportation and communications, food as well as for recreation and education.

Annual inflation fell from October’s 1.6% to 1.4% in November. The print undershot the 1.6% that market analysts had expected and represented the lowest rate in five years. Consequently, the trend continues to point downward, with annual average inflation inching down from 2.2% in October to 2.1% in November.

Meanwhile, the producer price index fell 2.7% in November over the same month last year (October: -2.2% year-on-year), which marked the lowest rate in 17 months. Moreover, the print exceeded the 2.4% decline that market analysts had expected. The annual average variation of the producer price index inched down from minus 1.6% in October to minus 1.7% in November.

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 November 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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