China Inflation September 2020


China: Price pressures soften in September

October 15, 2020

Consumer prices rose 0.2% over the previous month in September, following August’s 0.4% increase. The increase mainly reflected higher prices for the clothing and footwear as well as for education.

Inflation fell from August’s 2.4% to 1.7% in September. The print undershot the 1.9% result that market analysts had expected. Annual average inflation inched down from August’s 3.7% to 3.6% in September.

Annual producer prices (PPI), meanwhile, fell 2.1% year-on-year in September. The print was below both the 2.0% drop in August and the 1.8% decrease that market analysts had expected.

Inflation is moderating due to a high base effect from last year when consumer prices were plagued by a surge in pork prices. Meanwhile, producer prices remain in negative territory mainly reflecting low prices for oil and other row materials.

FocusEconomics panelists forecast that inflation will average 2.8% in 2020, which is unchanged from last month’s estimate, and 2.1% in 2021. Meanwhile, the panel expects producer prices to decline 1.8% in 2020, which is up 0.4 percentage points from last month’s projection, before rebounding to a 0.9% rise in 2021.

Author: Ricard Torné, Head of Data Analysis

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China Inflation Chart

China Inflation September 20 20

Note: Annual and monthly variation of consumer price index and annual variation of producer price index in %.
Source: National Bureau of Statistics of China (NBS).

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