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China’s consumer inflation accelerates for third month: Economic Watch
BEIJING, Sept. 10, 2018 (BSS/Xinhua) – China’s consumer price inflation
had increased at a faster pace than the previous month for three months in a
row by August, but the overall inflation risk is still muted.
The consumer price index (CPI), a main gauge of inflation, rose 2.3
percent year on year in August, compared with 2.1 percent for July, 1.9
percent for June, and 1.8 percent for both April and May, the National Bureau
of Statistics (NBS) said on its website Monday.
The August figure was the highest since February 2018, when the CPI was up
2.9 percent year on year, driven mainly by Spring Festival holiday factors.
The pickup was mainly attributed to a fast increase in non-food prices,
which rose 2.5 percent year on year and contributed to a 1.98-percentage-
point rise of the overall CPI increase.
Prices for medical products and services rose 4.3 percent year on year,
transport and communications prices gained 2.7 percent, while educational,
cultural and entertainment prices rose 2.6 percent, the bureau said.
Prices for dwelling-related expenses, including rents and utilities, rose
2.5 percent year on year.
Food prices rose 1.7 percent year on year, contributing to a 0.33-
percentage-point increase in the overall CPI increase.
The prices for eggs, fruits and vegetables went up 10.3 percent, 5.5
percent, and 4.3 percent, together resulting in CPI rise of about 0.25
percentage points.
On a month-on-month basis, the CPI increased 0.7 percent from July, as
food prices rose 2.4 percent from July.
NBS statistician Sheng Guoqing said vegetable prices surged 9 percent from
the previous month due to high temperatures and rainy weather, especially the
heavy rain in some northeastern and eastern provinces.
The fresh vegetable prices surged more than 20 percent in Liaoning, Jilin
and Shandong provinces, Sheng said.
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Pork prices rose 6.5 percent month on month, as continuous hot summer days
this year slowed pig growth and the African swine fever outbreak in some
areas of China exacerbated the pork supply, Sheng added.
“We think markets need to keep an eye on the development of African swine
fever, but otherwise the inflation worries are overdone,” Asian investment
bank Nomura said in a research note, shrugging off worries about rising
inflation risk.
As of Sept. 1, China had culled more than 38,000 pigs nationwide due to
the African swine fever.
“Temporary rise of food prices and rents due to some supply and demand
shocks could be short-lived, China’s overall CPI inflation risk is still
muted and could decline back to around 2.1 percent in September,” the note
reads.
China is aiming to keep annual CPI growth at around 3 percent this year,
the same as the 2017 target.
The average year-on-year CPI growth for the first eight months stood at 2
percent, unchanged from the first seven months, according to the NBS.
The producer price index, which measures costs for goods at the factory
gate, rose 4.1 percent year on year in August, slowing from the 4.6-percent
increase in July.
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