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China’s CPI rose 0.7% year-on-year in October and core inflation slowed, indicating that domestic demand is still weak; However, the PPI rose 5.7% year-on-year to its highest level in nearly four years, hit by rising energy costs from the conflict in the Middle East.
China’s National Bureau of Statistics announced today that China’s consumer price index (CPI) increased 0.7% year-on-year in October, a decrease of 0.2 percentage points from September.hong kong The October figure was 0.8% below market expectations and the lowest in nearly three months, the Economic Daily reported.
China’s producer price index (PPI) rose 5.7% year-on-year in October, 0.7 percentage points higher than September. The figure was above market expectations of 5.3%, the highest since June 2022, the Hong Kong Economic Daily reported.
Singapore’s Lianhe Zaobao reported that conflicts in the Middle East pushed up energy costs, pushing China’s October PPI to the fastest increase in more than four years. However, CPI growth slowed during the same period due to weak domestic demand.
Scholars interviewed believe that the October CPI shows that China’s supply and demand are still unbalanced, and there has been no significant improvement on the demand side.
In the CPI part, food prices fell 2.9% year-on-year in October, an increase of 1.2 percentage points from September, according to analysis by China’s National Bureau of Statistics; Energy prices rose 9.9% year over year, an increase of 2.6 percentage points, driven primarily by a more than 22% year-over-year increase in gasoline prices.
Excluding food and energy prices, core CPI rose 0.8% year-on-year in October, 0.2 percentage points lower than September, and the lowest in nine months.
In terms of monthly rates, the CPI in October was flat from a monthly increase of 0.2% in September. PPI increased by 0.7% monthly in October, 0.5 percentage point less than the 1.2% increase in September.
Summary FAQ
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China’s CPI rose 0.7% year-on-year in October, down 0.2 percentage points from September, and below market expectations of 0.8%. This was the lowest in the last three months, indicating that overall price growth is weak.
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In October, PPI increased by 5.7% year-on-year, 0.7 percentage points higher than September, better than the expected 5.3%, and the highest since June 2022. The main reason is that conflicts in the Middle East drive up energy costs.
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Core CPI rose 0.8% year-on-year, a nine-month low, indicating that demand is still not strong except for food and energy; At the same time, the CPI monthly rate remained flat, suggesting that the imbalance between supply and demand and weak domestic demand have not improved significantly.
