China Inflation At 2-Year High; Factory Gate Inflation Eases

chinaconsumerprices1 may12 10aug22 lt

China consumer price inflation accelerated to the highest in two years in July driven by pork prices, while factory gate inflation continued to ease, official data revealed Wednesday.

Consumer price inflation rose to a two-year high of 2.7 percent in July from 2.5 percent in June, the National Bureau of Statistics reported. But the rate was below economists' forecast of 2.9 percent.

Core inflation came in at 0.8 percent in July, down from 1.0 percent in June.

Food prices gained 6.3 percent, following June's 2.9 percent rise. The sharp increase was largely due to the 20.2 percent surge in pork prices. Fresh vegetable prices were up 12.9 percent.

Meanwhile, non-food price inflation slowed to 1.9 percent from 2.5 percent.

In a separate communiqué, the NBS said producer price inflation slowed to 4.2 percent in July from 6.1 percent in June. This was the lowest rate in 17 months and slower than the expected 4.8 percent.

Although inflation is nearing the government's 3 percent target, it is still very low by global standards, economists at Capital Economics said. The headline inflation is close to a peak and will drop back over the coming quarters.

Economists expect factory gate inflation to remain on a downward trajectory throughout the rest of the year amid a further drop in commodity prices, easing supply bottlenecks and a higher base for comparison.

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