China’s producer inflation reaches 5.7 per cent as consumer price rises ease
China’s annual consumer inflation slowed to 0.7 per cent in October, while producer prices rose 5.7 per cent from a year earlier. Falling food prices restrained the household index, but energy-related industries drove much of the monthly rise in factory prices. The figures show contrasting price pressures at the consumer and production stages of the economy.
Economics & Markets··Evening
Household inflation slows to 0.7 per cent
China’s annual consumer inflation slowed to 0.7 per cent in October, while annual producer inflation accelerated to 5.7 per cent. The national figures point to different price movements for households and at the factory gate. Consumer inflation eased even as the annual increase in industrial producer prices became stronger.[1], [2]
The National Bureau of Statistics of China reported unchanged consumer prices from September. Annual headline inflation slowed by 0.2 percentage points. Core inflation, which excludes food and energy, was 0.8 per cent, also down 0.2 percentage points. Producer prices rose 0.7 per cent over the month, a rise 0.5 percentage points smaller than in September; their annual increase accelerated by 0.7 percentage points.[1]
Cheaper food restrains the consumer index
Food prices fell 2.9 per cent from a year earlier, subtracting approximately 0.49 percentage points from consumer inflation. Fresh vegetables declined 16.9 per cent, pork 8.6 per cent and fresh fruit 3.8 per cent. Over the month, food prices fell 1 per cent: eggs dropped 6.3 per cent, vegetables 5.8 per cent and fruit 0.6 per cent.[1]
Annual energy inflation was 9.9 per cent, including a 22.4 per cent increase in petrol. Industrial consumer goods excluding energy rose 1.2 per cent. Services prices increased 0.7 per cent year on year, with medical services up 3.6 per cent. During the National Day travel period, hotel prices rose 6.5 per cent month on month, airfares 3.3 per cent and travel agency charges 2.4 per cent.[1]
Energy industries drive factory price increases
Six energy-related industries accounted for more than four fifths of the monthly producer-price increase. Oil and gas extraction prices rose 6 per cent month on month, while coal mining and washing increased 2.7 per cent. On an annual basis, the corresponding increases were 35 per cent for oil and gas extraction and 36.6 per cent for coal mining and washing.[1]
Further along the production chain, refined petroleum products and organic chemical raw materials each rose 6.8 per cent from September. Coal processing prices increased 3.2 per cent and gas production and supply 1.5 per cent. These energy-related movements accompanied the stronger annual producer index, even though its monthly rate of increase moderated.[1]
