China Inflation Rate Eases to 2.1% in December


Consumer prices in China rose 2.1 percent year-on-year in December of 2016, compared to a 2.3 percent rise in November while markets expected a 2.3 percent gain. The politically sensitive food prices increased by 2.4 percent while non-food cost rose at a slower 2.0 percent. Cost of consumer goods gained 1.8 percent and those of services advanced 2.5 percent.

Among food, prices rose at a slower pace for fresh vegetables +2.6 percent from +15.8 percent in November). Cost went up more than in a month earlier for pork (+6.2 percent from +5.6 percent) and fresh fruits (+3.2 percent from +2.8 percent). In contrast, cost fell for: eggs (-4.5 percent from -2.2 percent), milk (-0.2 percent from -0.2 percent) and tobaco (-0.2 percent from -0.1 percent).

For non-food categories, cost increased at a slower pace for: clothing (+1.1 percent from +1.4 percent) and other goods and services (+4.0 percent from +4.2 percent). Prices rose at a faster pace for: rent, fuel & utilities (+2.1 percent from +2.0 percent), household goods and services (+0.4 percent from +0.3 percent), transport & communication (+0.9 percent from a flat reading); education, culture & recreation (+2.3 percent from +2.2 percent) and healthcare (+4.6 percent from +4.4 percent).

For the whole year of 2016, inflation was 2 percent, below government target at around 3 percent. 

On a monthly basis, consumer prices rose 0.2 percent, following a 0.1 percent rise in a month earlier. It was the second straight month of increase but below market consensus of a 0.3 percent gain.

The producer prices index rose 5.5 percent year-on-year in December, following a 3.3 percent rise in the preceding month and beating market consensus of a 4.5 percent gain. It was the fourth straight month of increase and the fastest since September 2011.

Statistics China l Rida Husna | rida@tradingeconomics.com
1/10/2017 11:51:20 AM