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China Economy

China inflation climbs to 2.5 per cent, higher than forecasts

Inflation rising in most developed economies, sparked by global recovery in manufacturing

PUBLISHED : Tuesday, 14 February, 2017, 10:01am
UPDATED : Tuesday, 14 February, 2017, 10:01am

China’s consumer inflation rate quickened to 2.5 per cent in January from a year earlier, the highest since May 2014 and beating market expectations.

Analysts had predicted the consumer price index would rise 2.4 per cent, the biggest gain in nearly three years, versus a 2.1 per cent gain in December.

The producer price inflation rate accelerated to 6.9 per cent, the National Bureau of Statistics said on Tuesday, compared with the previous month’s rise of 5.5 per cent.

China keeps 2016 growth on track but faces uphill battle in 2017

The producer price index rose the fastest since August 2011.

The market had expected producer prices to rise 6.3 per cent on an annual basis.

Inflation expectations have been rising in most major developed economies, except Japan, since mid-2016 in line with a global recovery in manufacturing, which has boosted prices of crude oil and other resources such as iron ore.

That has sparked talk of tighter monetary policy, although consumer inflation in China is believed to be still well within the central bank’s comfort zone.