China inflation: easing consumer, factory-gate price pressure opens door for Beijing to support slowing economy
- China’s official consumer price index (CPI) rose by 1.5 per cent in December from a year earlier, down from 2.3 per cent growth in November
- China’s producer price index (PPI) rose by 10.3 per cent in December, down from a rise of 12.9 per cent in November
China’s improving consumer and factory-gate inflation outlook will leave more room for easing monetary policy in the coming months, with next week’s headline growth rate figures set to confirm the anticipated slowdown.
China’s official producer price index (PPI), which reflects the prices factories charge wholesalers for products, rose by 10.3 per cent in December from a year earlier, down from a rise of 12.9 per cent growth in November, according to the National Bureau of Statistics (NBS).
We don’t think inflation concerns will hold back the [People’s Bank of China] from further loosening measures, including policy-rate cuts
“Chinese inflation dropped back last month, consistent with our view that the acceleration in price gains in earlier months would prove temporary. We think factory-gate inflation will continue to moderate going forward and that consumer price inflation will remain muted,” said Sheana Yue, China economist at Capital Economics.