China Inflation Rate Rises to 3-Month High in June



China's consumer price inflation edged up to 1.9 percent year-on-year in June of 2018 from 1.8 percent in the previous month and matching market consensus. It is the highest rate since March, as prices of food went up at a faster pace and cost of non-food continued to increase.

In June, the politically sensitive food prices increased by 0.3 percent, faster than a 0.1 percent rise in the prior month. Prices continued to rise  for fresh vegetables (9.3 percet from 10 percent in May) and eggs (15.1 percent from 20.8 percent); while fell less for pork (-12.8 percent from -16.7 percent); and  continued to decline for fresh fruit (-5.3 percent from -2.7 percent). 

Meantime, cost of non-food went up 2.2 percent, the same as in May. Upward pressure came from: transport and communication (2.4 percent from 1.8 percent); other goods and services (0.9 percent from 1 percent); clothing (1.1 percent, the same as in May); rent, fuel & utilities (2.3 percent from 2.2 percent in May);  household goods and services (1.5 percent, the same as in May); healthcare (5 percent from 5.1 percent); and education, culture and recreation (1.8 percent from 1.9 percent).

Annual core inflation, which excludes the prices of food and energy, stood at 1.9 percent, the same as in the previous month.

For 2018, China set its consumer inflation target at around 3 percent, in line with the preceding year's figure.

On a monthly basis, consumer prices fell by 0.1 percent, following a 0.2 percent drop in May and in line with expectations.

Meanwhile, the producer price index increased by 4.7 percent from a year earlier in June of 2018, after a 4.1 percent rise in the previous month and above market expectations of 4.5 percent. It is the highest producer inflation since last December. Prices of means of production went up at a faster pace (6.1 percent from 5.4 percent in May), namely extraction (11.5 percent from 8.1 percent), raw materials (8.8 percent from 7.4 percent) and processing (4.6 percent from 4.4 percent). Also, cost of consumer goods rose more (0.4 percent from 0.3 percent), namely food production (0.7 percent from 0.3 percent), clothing (0.3 percent from 0.3 percent); daily use goods (1.1 percent from 1.1 percent); while prices of consumer durable goods declined less (-0.5 percent from -0.7 percent). On a monthly basis, producer prices went up by 0.3 percent.

China Inflation Rate Rises to 3-Month High in June


Statistics China | Rida | rida@tradingeconomics.com
7/10/2018 11:17:00 AM