Related News

Home » Business » Economy

China’s PPI growth slows in March after six-month acceleration

CHINA'S consumer inflation warmed up slightly in March while factory gate inflation cooled for the first time in six months, revealing stability in the economy.

The Consumer Price Index, a main gauge of inflation, rose 0.9 percent year on year in March, 0.1 percentage points higher than February, the National Bureau of Statistics said today.

The reading was generally in line with market consensus forecast for 1 percent.

Meanwhile, the Producer Price Index, which measures costs for goods at the factory gate, rose 7.6 percent, 0.2 percentage points slower than February's 7.8 percent, which was a eight-year record.

That compared with market hopes of 7.5 percent.

Sheng Guoqing, a bureau analyst, said price increases in non-food sectors were overshadowed by price drops in food, resulting in the mild inflation in March.

Non-food prices rose 2.3 percent year-on-year, 0.1 percentage points faster than February, while food prices dropped 4.4 percent, and the decline was 0.1 percentage points wider than February.

Prices of fresh vegetables tumbled nearly 28 percent, resulting in 0.95 percentage points decline in CPI.

Concerning PPI, Sheng said prices hikes slowed down across oil, steel, chemicals, and non-ferrous metal industries.

Economists said both the consumer and factory gate inflation were generally stable in March, allowing the People's Bank of China to maintain a relatively tight monetary stance.

“China’s PPI should have passed its peak although it’s likely to remain high on a year-on-year basis in the coming months,” Australia and New Zealand Banking Group said in a note today. “The divergence between the prices of production goods and consumption goods in the PPI basket remains.”

The bank forecast a 2.4 percent rise in China’s CPI in 2017, a bit higher than the 2.0 percent in 2016.

“The contribution of the high base effect from food prices last year should weaken going forward and non-food prices should maintain a mild rising momentum,” it said. “The still-strong PPI should keep producers’ profits at a reasonable level, which, when combined with the stable CPI outlook, allows the PBoC to focus on deleverage.”


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend