China's consumer inflation eased for a
third straight month and hit an 11-year low in October as food prices
tumbled, official data showed Tuesday.
consumer price index (CPI), a main gauge of inflation, rose 0.5 percent
year on year last month, narrowing from the 1.7-percent rise in
September, according to data from the National Bureau of Statistics
On a monthly basis, consumer
prices dropped 0.3 percent. Food prices, which account for nearly
one-third of China's CPI, went down 1.8 percent last month.
Lijuan, a senior statistician with the NBS, attributed the tamed
inflation to the drop in food prices, especially eggs, vegetables and
In breakdown, pork prices fell 7
percent last month, a further decline of 5.4 percentage points than
September, as hog production capacity continues bouncing back, and pork
supply keeps improving.
Prices of eggs and vegetables dropped 2.3 percent and 2.1 percent respectively from September amid abundant supply.
said that the high base of comparison in the same period last year,
waning carry-over effect, and the falling pork prices have led to the
further decline in year-on-year CPI growth.
a yearly basis, the prices of pork fell for the first time after
growing for 19 consecutive months, dropping 2.8 percent, according to
Though last month's headline
inflation hit a record low since October in 2009, analysts with Nomura, a
financial service firm, dismissed "unwarranted" concerns over
disinflation or deflation in China.
decline in CPI inflation does not mean China is experiencing
disinflation or deflation, as the drop was mainly driven by pork prices,
which was due to the high base as a result of African Swine Fever,
sequentially weaker pork prices, and the increased weighting of pork in
the CPI basket," said an e-mailed research note by the firm.
the pork, CPI inflation actually bottomed out in July at 0.4 percent
year on year and remained stable at 0.7 percent between August and
October," the note added.
with Huatai Securities expect the trend of reflation to remain intact in
China, and the headline inflation to pick up by the end of the first
quarter of 2021 given the recent recovery of consumer demand and the
accelerated development in vaccines against COVID-19.
producer prices continued to fall in October, but the decline kept
unchanged from the previous month amid a recovery in industrial
activities, official data showed Tuesday.
producer price index (PPI), which measures costs for goods at the
factory gate, fell 2.1 percent year on year last month, data from the
Affected by downward
international prices of crude oil, the sub-index for the oil and gas
extraction industry went down 4.9 percent from the previous month, Dong
Since the third quarter,
Chinese enterprises have seen improvement in cash flow and
profitability, said the Huatai Securities, adding that continued
recovery of PPI in China is expected in the coming months, and may
accelerate in the first quarter of next year.