BEIJING, April 11, 2019 (BSS/AFP) – Factory and consumer inflation in
China picked up in March, indicating some much-needed stability in the
world’s number two economy though analysts warned it is not yet out of the
woods.
Beijing has struggled to get prices to pick up in recent months, with both
measures staying stubbornly low as the global growth cools leading to weak
demand while the US trade war drags on.
But on Thursday data showed the consumer price index (CPI) — a key
measure of retail inflation — rose 2.3 percent on-year last month, sharply
up from 1.5 percent in February.
The gain came on the back of a jump in the price of meat including beef
and lamb, with pork also soaring owing to an outbreak of African swine flu in
China that has led to the culling of a million pigs. Fresh fruit and
vegetable prices also jumped.
The producer price index (PPI) — an important barometer of domestic
demand — climbed 0.4 percent, from a 0.1 percent in February and snapping
seven months of falling.
The CPI and PPI readings were in line with forecasts in a Bloomberg survey
but economists remain sceptical about the outlook.
There is “no turnaround in underlying inflation yet”, said Julian Evans-
Pritchard of Capital Economics.
“Higher food and oil prices pushed up headline inflation last month but
broader price pressures remain subdued,” said Evans-Pritchard, attributing
the rise in factory gate prices to rising raw material costs such as oil.
Growth in China dropped to 6.6 percent last year, its lowest almost three
decades and the government last month said it was aiming for expansion of
between six and 6.5 percent in 2019.
“Continued economic weakness is likely to keep a lid on broader price
pressures,” said Evans-Pritchard.