China’s consumer price grew at faster pace in Dec driven by rising food prices, factory-gate price fell at slower rate amid falling oil prices
DATA MACRO
China’s consumer price grew at faster pace in Dec driven by rising food prices, factory-gate price fell at slower rate amid falling oil prices
DATA MACRO

China’s consumer price grew at faster pace in Dec driven by rising food prices, factory-gate price fell at slower rate amid falling oil prices

 

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China’s consumer price grew at a faster pace in December driven by rising food prices while producer price index declined by a slower pace amid falling oil prices.

The consumer price index (CPI) grew by 1.8% in December from a year earlier, accelerating from the 1.6% gain in the previous month, according to data released by the National Bureau of Statistics (NBS) on Thursday.

For the full year of 2022, China’s CPI grew by 2% from the previous year, compared with the government target of a rise of around 3%.

Food price grew by 4.8% on year last month, accelerating by 1.1 percentage points from November, according to the data. 

In breakdown, pork prices grew by 22.2% in December from a year earlier, slowing by 12.2 percentage points from November; fruit price grew by 11%, also faster than a month earlier; egg, edible oil and grain price grew by 10%, 7.2% and 2.6%, respectively; vegetable price fell 8%, narrowing by 13.2 percentage points from November, said the NBS.

Non-food price grew by 1.1% in December from a year earlier, in line with the growth in the previous month, showed the data.

Gasoline and diesel price grew by 10.5% and 11.4% year on year, respectively, both slowing from the previous month; air ticket price surged by 26.7%, accelerating by 7.8 percentage points from November.

Excluding food and energy prices, China’s core CPI grew by 0.7% in December from a year ago, accelerating slightly by 0.1 percentage points from a month earlier.

The producer price index (PPI) declined by 0.7% in December from a year ago, narrowing from the 1.3% drop in the previous month, showed NBS data. For the full year of 2022, China’s PPI grew by 4.1%.

Prices in the metal smelting, non-metal mineral and coal mining and washing industries declined at a slower pace year over year, while prices in the oil and natural gas exploration and farming food processing industries grew at a slower rate, showed the data.

“There are some early signs that the transition toward living with COVID is starting to put upward pressure on prices,” said Zichun Huang, economist at Capital Economics. “But the uptick in inflation is unlikely to be as large as that seen in many other economies as they reopened.”

“As inflation will remain manageable over the foreseeable future, we think the People’s Bank of China will need to lower the MLF (policy) rate by 10 bps in the first quarter,” said Zhou Hao, chief economist at Guotai Junan Group.