China: Inflation accelerates in June
July 9, 2013
In June, consumer prices increased 2.7% over the same month last year. The reading was well above the 2.1% rise observed in May and overshot market expectations that had prices rising 2.5%. Moreover, excluding January and February data - which are highly distorted due to seasonal effects stemming from the Chinese Lunar New Year -, the June figure marks the highest level tallied since May 2012. According to the statistical office, inflation accelerated on the back of higher food prices, particularly for fresh vegetables and meat.
Meanwhile, in June, the producer price index fell 2.7% over the same month last year, which was up from the 2.9% drop witnessed in May. Moreover, the print exceeded the 2.6% decline expected by market analysts. As a result of the softer decrease, the annual average variation of the producer price index remained at May's minus 2.5%.
Despite the spike recorded in June, the trend in consumer prices has stabilized, with annual average inflation remaining unchanged at May's 2.2%. The government expects that inflation will average 3.5% this year. FocusEconomics Consensus Forecast participants anticipate inflation to average 2.9% in 2013, which is down 0.2 percentage points from last month's estimate. In 2014, the panel sees inflation rising to 3.4%.