China August Inflation Rate Steady at 2.8%


China's annual inflation rate was at 2.8 percent in August 2019, unchanged from the previous month and above market forecasts of 2.6 percent. It remained the highest consumer inflation rate since February 2018, driven by persistently high pork prices amid an outbreak of African swine fever.

The politically sensitive food inflation surged to 10 percent in August, as pork prices soared 46.7 percent, the sixth straight month of increase, after a 27 percent increase in July. Also, cost of edible oil rose further (1 percent vs 0.4 percent). Meantime, prices slowed for fresh fruits (24 percent vs 39.1 percet) and eggs (3.6 percent vs 10.5 percent) while cost of fresh vegetables fell (-0.8 percent vs 5.2 percent).

Non-food price inflation eased to 1.1 percent from 1.3 percent in the prior month, mainly due to rent, fuel & utilities (1 percent vs 1.5 percent); clothing (1.6 percent vs 1.8 percent); household goods & services (0.7 percent vs 0.8 percent); healthcare (2.3 percent vs 2.6 percent); and education, culture & recreation (2.1 percent vs 2.3 percent). In addition, transport and communication prices dropped faster (-2.3 percent vs -2.1 percent). By contrast, cost of other goods and services advanced at a faster pace (4.7 percent vs 3.4 percent).

Annual core inflation, which strips out volatile food and energy prices, edged down to 1.5 percent in August from 1.6 percent in July.

On a monthly basis, consumer prices went up 0.7 percent in August, the most since February, following a 0.4 percent gain in July and higher than market expectations of a 0.5 percent rise.

Meanwhile, China's producer price index fell 0.8 percent year-on-year in August 2019, following a 0.3 percent decrease in the previous month and compared with market expectations of a 0.9 percent decline. It was the sharpest fall in producer prices since August 2016, as cost of means of production dropped further (-1.3 percent vs -0.7 percent in July), mainly due to raw materials (-3.5 percent vs -2.9 percent), processing (-0.8 percent vs -0.2 percent), and extraction (2.8 percent vs 3.2 percent). Also, prices eased for consumer goods (0.7 percent vs 0.8 percent), of which durable goods (-2 percent vs -1.2 percent), food production (2 percent vs 2.2 percent), clothing (0.9 percent vs 1.3 percent) and daily use goods (0.6 percent vs 0.8 percent).

China August Inflation Rate Steady at 2.8%


Statistics China | Stefanie Moya | stefanie.moya@tradingeconomics.com
9/10/2019 10:00:10 AM