- January 11, 2021
- Posted by: Bastion team
- Category: Markets
(RTTNews) – China’s consumer price inflation retuned to positive territory in December after turning negative for the first time in more than a decade in November, data published by the National Bureau of Statistics revealed Monday.
Consumer prices climbed 0.2 percent on a yearly basis in December, reversing a 0.5 percent fall in November. Economists had forecast prices to gain 0.1 percent.
Food prices grew 1.2 percent, in contrast to November’s 2 percent decline as pork prices increased 6.5 percent from the previous month. At the same time, non-food prices remained flat.
Dong Lijuan, an economist at the NBS, said food prices increased at the end of year due to severe weather and seasonal holiday demand pushed up meat prices.
Month-on-month, consumer prices were up 0.7 percent, which was faster than the 0.4 percent growth expected by economists.
Meanwhile, core consumer price inflation slowed marginally to 0.4 percent from 0.5 percent.
Another report from NBS showed that producer prices declined 0.4 percent year-on-year in December, but much slower than the 1.5 percent decrease seen in November and the expected fall of 0.8 percent.
On a monthly basis, factory gate prices advanced 1.1 percent in December, the fastest since December 2016.
Consumer prices may slip back into deflation over the next couple of months due to a jump in pork prices a year ago, but this should prove temporary, Julian Evans-Pritchard and Sheana Yue, economists at Capital Economics, said.
With economic activity set to remain strong and underlying inflation likely to rebound, the PBoC is likely to tighten policy this year, the economist added.
Bastion Balance Seoul, Korea.