China Inflation Rate Slows to 13-Month Low of 1.5% in February


China's consumer price inflation fell to 1.5 percent year-on-year in February 2019 from 1.7 percent in the previous month and matching market consensus. This was the lowest inflation rate since January last year, mainly due to a marked slowdown in prices of food.

The politically sensitive food inflation eased to a seven-month low of 0.7 percent in February from 1.9 percent in the preceding month, as prices rose at a softer pace for: fresh vegetables (1.7 percent vs 3.8 percent in January), and fresh fruit (4.8 percent vs 5.9 percent); while cost fell for:  eggs (-4.7 percent vs 0.3 percent); pork (-4.8 percent vs -3.2 percent); and edible oil (-0.3 percent, the same as in January).

Cost of non-food rose 1.7 percent in February unchanged from a month earlier. Prices advanced further for clothing (2.0 percent vs 1.6 percent); and healthcare (2.8 percent vs 2.7 percent) and cost of transport and communication fell less (-1.2 percent vs -1.3 percent). On the other hand, prices slowed for household goods and services (1.3 percent vs 1.5 percent); education, culture and recreation (2.4 percent vs 2.9 percent); and other goods and services (2.0 percent vs 2.3 percent). Also, inflation was steady for rent, fuel & utilities (2.2 percent, the same as in January).

Annual core inflation, which strips out volatile food and energy prices, edged down to 1.8 percent in February from 1.9 percent the previous month.

On a monthly basis, consumer prices went up 1.0 percent in February, after a 0.5 percent rise in January and above market expectations of 0.7 percent gain. It marked the highest monthly figure in a year.

Meantime, China's producer price index increased by 0.1 percent from a year earlier in February 2019, unchanged from the January's 28-month low figure and below market estimates of 0.2 percent. Prices of means of production continued to fall (-0.1 percent, the same as in January), namely raw materials (-1.5 percent vs -1.6 percent), while inflation was steady for processing (at 0.3 percent) and  cost of extraction rose further (1.8 percent vs 1.2 percent). In addition, consumer goods inflation edged down to 0.4 percent from 0.6 percent, of which daily use goods (0.2 percent vs 0.3 percent); durable goods (-0.6 percent vs a flat reading); food production (0.8 percent, the same as in January), and clothing (1.6 percent, the same as in January). On a monthly basis, producer prices fell 0.1 percent in February, following a 0.6 percent fall in January and marking the fourth straight month of drop.

China Inflation Rate Slows to 13-Month Low of 1.5% in February


Statistics China l Rida Husna | rida@tradingeconomics.com
3/11/2019 10:31:03 AM