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China’s Inflation Rises by 1.4% Beating Expectations

China’s core inflation rate rose by 1.4% in February from a year earlier, recovering from a more than five-year low and exceeding most expectations.

The consumer price inflation (CPI) data compares with a rise of 0.8% in January, which was the weakest reading since November 2009.

China’s new consumer inflation target is about 3%, down from 3.5% in 2014.
The rise in inflation for the period was attributed by officials to China’s Lunar New Year celebrations.

The official number could ease some deflation worries for the world’s second-largest economy, although analysts were unconvinced the holiday period was a factor for the year-on-year rise.

“The statistical office said Lunar New Year was the reason behind higher inflation, although we feel this explanation is not sufficient given that last year Lunar New Year was also in February,” said economist Dariusz Kowalczyk from Credit Agricole in Hong Kong.

“In any case, the data confirms our view that there will be no further rate cuts considering that the [reserve bank] said it was managing real rates and these are much lower now with higher inflation,” he said.

via BBC [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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