China Inflation Rate at 6-Month Low of 1.5% in January


China's consumer prices rose by 1.5 percent year-on-year in January of 2018, after a 1.8 percent rise in the prior month and matching market consensus. It was the lowest inflation rate since July 2017 as cost of non-food grew at a slower pace and cost of food fell further.

In January, the politically sensitive food prices declined by 0.5 percent (from -0.4 percent in the prior month), while non-food cost rose at a softer 2.0 percent (from 2.4 percent). Cost of consumer goods went up 1.0 percent (from 1.1 percent) and those of services increased by 2.3 percent (from 3.0 percent). 
Among food, prices dropped for: pork (-10.6 percent from -8.3 percent) and fresh vegetables (-5.8 percent from -8.6 percent). In contrast, prices rose for: eggs (14.2 percent from 11.4 percent); milk (0.9 percent from 0.6 percent), fresh fruits (6.4 percent from 6.3 percent) and tobacco (0.1 percent from a flat reading in December 2017).
For non-food, prices increased at a slower pace for most categories: rent, fuel & utilities (2.7 percent from 2.8 percent); household goods and services (1.5 percent from 1.6 percent); transport and communication (0.2 percent from 1.2 percent); education, culture & recreation (0.9 percent from 2.1 percent); healthcare (6.2 percent from 6.6 percent) and other goods and services (1.2 percent from 1.9 percet). Meantime, cost went up more only for clothing (1.4 percent from 1.3 percent).
On a monthly basis, consumer prices increased by  0.6 percent, following a 0.3 percent gain in the preceding month and slightly below estimates of a 0.7 percent rise. It was the highest monthly figure in a year.

The producer price index increased by 4.3 percent from a year earlier in January 2018, compared to a 4.9 percent rise in the prior month, while markets estimated a 4.4 percent gain. It was the 17th straight month of rise in producer prices but the smallest since November 2016. Cost rose less for means of production (5.7 percent from 6.4 percent in December), namely extraction (6.8 percent), raw materials (7.3 percent) and processing (4.9 percent). Also, prices rose at a softer pace for consumer goods (0.3 percent from 0.5 percent) namely daily use goods (1.4 percent); clothing (0.8 percent), while food production was flat. At the same time, prices of consumer durable goods declined at a faster 0.3 percent (from -0.2 percent  in the prior month). On a monthly basis, producer prices rose 0.3 percent, following  a 0.8 percent gain in December 2017.

China Inflation Rate at 6-Month Low of 1.5% in January


Statistics China l Rida Husna | rida@tradingeconomics.com
2/9/2018 5:47:37 PM