Inflation in China

China Inflation | Economic News & Forecasts

China - Inflation

Price pressures moderate sharply in December

Consumer prices were from the previous month in December, following November’s eight-month low of 0.3%. The reading was primarily driven by an increase in prices for fresh vegetables as well as for household appliances and services, which more than offset a sizeable drop in fuel prices.

Inflation declined from November’s 2.2% to a six-month low of 1.9% in December. The print was below the 2.1% that market analysts had expected. Annual average inflation stabilized at November’s 2.1% in December.

Producer price inflation, meanwhile, slowed markedly from 2.7% in November to 0.9% in December. The reading was well below market analysts’ expectations of 2.1% and the lowest result in over two years.

Economists at Nomura point out that:

“Rapidly falling inflation, especially factory-gate PPI inflation, is further evidence that China’s economy is slowing at a worrying pace. Slumping PPI inflation suggests corporate earnings will almost surely continue to fall in coming months. We expect PPI inflation to soon return to negative territory, reducing inventory stocks and exerting further downward pressure on China’s growth. On the positive side, falling inflation leaves more room for Beijing to roll out more aggressive policies to bolster growth and could lead to lower interbank rates and bond yields.”


China Inflation Forecast


FocusEconomics Consensus Forecast participants expect that consumer inflation will average 2.3% in 2019, which is unchanged from last month’s estimate. In 2020, the panel also sees consumer inflation at 2.3%. Meanwhile, the panel expects producer inflation to be 2.3% in 2019, which is unchanged from last month’s projection. In 2020, panelists see producer inflation at 1.8%.

China - Inflation Data

2013  2014  2015  2016  2017  
Inflation Rate (CPI, annual variation in %)2.6  2.0  1.4  2.0  1.6  

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China Inflation Chart


China Inflation
Note: Annual variation of consumer price index (CPI) in %.
Source: National Bureau of Statistics of China and FocusEconomics calculations.

China Facts

ValueChangeDate
Bond Yield3.11-0.40 %Jan 16
Exchange Rate6.76-0.19 %Jan 16
Stock Market2,570-0.34 %Jan 16

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