China CPI inflation fell to 1.7% yoy in October9 November, 2012, 10:04. Posted by Zarathustra
China’s CPI inflation fell in October. Headline CPI inflation fell from 1.9% yoy in September to 1.7% yoy in October. The market was expecting CPI inflation to be unchanged on a year-on-year basis.
On a month-on-month basis, headline CPI was –0.1%, back to a deflationary territory after returning to positive month-on-month price change for the previous two months.
Looking into individual components, there is almost nothing in particular which would draw anybody’s attention. Food prices were up 1.8% yoy, lowest since late 2009, while non-food prices increased by 1.7% yoy. Thus prices of most categories of products remain largely stable.
Meanwhile, producer price index for October was –2.8% yoy, up from –3.6% yoy, but below consensus estimate of –2.7% yoy. On a month-on-month basis, it returns to positive territory at 0.2% after staying negative for 5 consecutive months.
Source: National Bureau of Statistics
Inflation continues to be subdued, which confirms our long-standing view that inflationary pressure in non-food categories is minimal because of overcapacity, and our worries on the possibility of a temporary food inflation is not materialising for the time being, which contributes to the overall price stability as food tends to be the volatile component which drive inflation higher.