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China's Inflation on Solid Growth as Economy Stabilises

13 November 2017

CHINA - China reported mild consumer inflation growth in October while producer prices posted a strong increase, beating market forecasts.

The consumer price index (CPI) rose 1.9 per cent year-on-year in October, up from September's 1.6 per cent, the National Bureau of Statistics (NBS) said in a statement.

This was the biggest increase in nine months, but was still considered moderate compared to the government goal of around 3 per cent for the whole year.

The number perfectly met market expectations, and was mainly a result of rising non-food prices, China Merchants Securities said in a research note.

Food prices, which account for a significant part of the CPI calculation, dropped 0.4 per cent from a year earlier, dragging down the CPI number by 0.08 percentage points, according to NBS statistician Sheng Guoqing.

The price of pork, a staple meat in China, slumped 10.1 per cent.

On a monthly basis, the index was up 0.1 per cent, lower than the 0.5-per-cent in the previous month.

As demand fell after the National Day Holiday at the beginning of October, the price of eggs declined 5.4 per cent month-on-month. Air ticket prices and travel agency charges also slumped 9.1 per cent and 2.7 per cent respectively from a month earlier.

For the first ten months of the year, the CPI climbed 1.5 per cent from a year earlier.

In the fourth quarter, the CPI is likely to rise at around 2 per cent as demand for pork rises, estimated China Merchants Securities.

The mild inflation will not change the central bank's monetary stance, which will stay prudent and neutral, it said.

Thursday's data also showed that China's producer price index (PPI), which measures costs of goods at the factory gate, rose 6.9 per cent year on year in October, on par with last month.

The pace was well above market forecast, lifted mainly by a rebound of the international oil price, according to China Merchants Securities.

ThePoultrySite News Desk



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