In January, consumer prices rose 0.6% from the previous month, up from Decemberâs 0.3% rise. The print reflected higher prices for food, tobacco, and liquors as well as for transportation and communication.
Inflation fell from Decemberâs 1.8% to 1.5% in January. The print was in line with what market analysts had expected and represented a six-month low. Annual average inflation, meanwhile, inched down from Decemberâs 1.6% to 1.5% in January.
Note:Â Year-on-year and annual average variation of consumer price index in %.
Source:Â National Bureau of Statistics of China (NBS).
Producer inflation fell from 4.9% in December to 4.3% in January. The print was slightly below market analystsâ expectations of 4.4% and represented the lowest level since November 2016. Annual average producer inflation fell from Decemberâs 6.3% to 6.1% in January.
Januaryâs dip in inflation is expected to be temporary as it largely reflects seasonal distortions related to the Lunar New Year. The slide in producer inflation was mostly due to lower growth in commodity prices.
China Inflation Forecast
FocusEconomics Consensus Forecast participants expect that consumer inflation will average 2.2% in 2018, which is unchanged from last monthâs estimate. In 2019, the panel sees consumer inflation at 2.3%. Meanwhile, the panel expects producer inflation to be 1.3% in 2018, which is up 0.3 percentage points from last monthâs projection. In 2019, panelists see producer inflation at 1.1%.