KURE - China inflation rate lowest in over 2 Years amid rocky economic recovery from the coronavirus-induced slump

2023-05-11 01:56:24 ET

• China's annual inflation rate fell to 0.1% in April 2023 from 0.7% in the previous month, missing market estimates of 0.4%.

• This was the lowest print since a deflation in February 2021 amid an uneven economic recovery after the removal of a zero-COVID policy, with prices of both food and non-food easing further.

• Meanwhile, the producer price index ( PPI ), which reflects the prices that factories charge wholesalers for products, fell by 3.6 per cent in April, year on year, down from a fall of 2.5 per cent in March.

• PPI fell at the fastest rate since May 2020 and was down for a seventh consecutive month after missing expectations for a fall of 3.3 per cent last month.

• This was below expectations, with PPI having been expected to fall by 3.3 per cent last month.

• Food inflation dropped to a 13-month low (0.4% vs 2.4% in March), due to a notable slowdown in prices of pork and a steeper drop in cost of fresh vegetables.

• Also, non-food prices continued to ease (0.1% vs 0.3%), owing to further falls in prices of transport (-3.3% vs -1.9%) and housing (-0.3% vs -0.2%). By contrast, inflation was unchanged for health (at 1.0%) while cost quickened for education (1.9% vs 1.4%).

• Core consumer prices, excluding the volatile prices of food and energy, went up 0.7% yoy, the same pace as in March.

• On a monthly basis, consumer prices unexpectedly dropped 0.1%, the third straight month of fall, missing estimates of a flat reading.

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