Inflation in China
China - Inflation
Inflation surges in January due to Chinese New Year holidays and coronavirus outbreak
Consumer prices rose 1.4% over the previous month in January, well above December’s flat reading. The print mostly reflected a surge in food prices due to disruptions related to the Chinese New Year holidays and shortage of pork supply.
Inflation jumped from December’s 4.5% to 5.4% in January. The print was above market analysts’ expectations of 4.9% and the strongest result in over eight years. Annual average inflation rose from 2.9% in December to 3.2% in January.
Annual producer prices (PPI), meanwhile, rose 0.1% year-on-year in January. The print contrasted the 0.5% drop in December and was above the flat reading that market analysts had expected.
Yi David Wang, head of China economics at Credit Suisse, comments that the outbreak of the coronavirus also played a role in January’s inflation reading:
“Service disruption from coronavirus containment contributed to the spike in food prices. But the decline in broader domestic demand means that services and core inflation remained weak. The coronavirus outbreak may keep CPI inflation above 4.5%yoy in 2020H1 due to transport disruptions and supply shocks from lockdowns. Even after the coronavirus is contained, it may still take time for the supply to recover. […] The rise in PPI inflation in January is mainly due to a low comparison base even the global oil prices have fallen 6.0%yoy in January. We expect that PPI inflation is poised to decline again in the coming months. We also expect the authorities to mitigate the negative impact from coronavirus outbreak with policy support, both monetary and fiscal.”
FocusEconomics Consensus Forecast participants expect that consumer inflation will average 2.4% in 2020, which is up 0.1 percentage points from last month’s estimate, and 2.3% in 2021. Meanwhile, the panel expects producer inflation to be 0.7% in 2020, which is unchanged from last month’s projection, and 1.5% in 2021.
China - Inflation Data
|Inflation Rate (CPI, annual variation in %)||2.0||1.4||2.0||1.6||2.1|
5 years of economic forecasts for more than 30 economic indicators.
China Inflation Chart
Source: National Bureau of Statistics of China and FocusEconomics calculations.
|Bond Yield||3.17||-0.40 %||Dec 31|
|Exchange Rate||6.96||-0.19 %||Jan 01|
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February 20, 2020
In January, Chinese banks distributed CNY 3.34 trillion (USD 476 billion) in new yuan loans.
February 17, 2020
House prices in 70 large- and medium-sized cities rose 0.2% in January in month-on-month terms according to a weighted average index calculated by Refinitiv from data issued by the National Bureau of Statistics (NBS).
February 10, 2020
Consumer prices rose 1.4% over the previous month in January, well above December’s flat reading.
January 30, 2020
The manufacturing Purchasing Managers’ Index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) fell from December’s 50.2% to 50.0% in January.
January 23, 2020
On 15 January, the United States and China signed off on a “phase one” trade deal, as had been expected.