China March Consumer Inflation Stable, but Producer Prices Fall Again

China’s consumer price inflation rose less than expected in March, flattening out after a four-month strengthening trend, but wholesale prices remained stubbornly in deflation.

Consumer prices in March rose 2.3 percent, below a median forecast of 2.5 percent in a Reuters poll but equal to February’s increase of 2.3 percent. Although the prior month’s figure represented the fastest rise in more than a year, the increase was driven largely by sharp gains in food prices following an unexpectedly harsh winter.

Economists have been watching closely to see how inflation evolves in China this year following a prolonged easing campaign by the central bank beginning in late 2014, which has boosted credit, but has yet to result in substantial price increases.

Producer prices fell 4.3 percent in March, extending their decline to a full four years, but at a slower rate than forecasts of a 4.6 percent decline. Falling commodity prices and overcapacity in key industrial sectors have helped mire producer prices in a lengthy slump, although declines have eased in recent months.

Reuters

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.