Economic Watch: China's consumer inflation eases, factory prices likely to recover-Xinhua

Economic Watch: China's consumer inflation eases, factory prices likely to recover

Source: Xinhua

Editor: huaxia

2022-12-09 21:29:31

BEIJING, Dec. 9 (Xinhua) -- China's consumer inflation tempered in November as market supply increased, while factory-gate prices showed signs of bottoming out with month-on-month improvement, official data showed Friday.

The consumer price index (CPI), a main gauge of inflation, rose 1.6 percent year on year in November, down from the 2.1-percent uptick in October, the National Bureau of Statistics (NBS) said Friday.

On a monthly basis, the CPI edged down 0.2 percent, affected by domestic COVID-19 outbreaks and seasonality, noted Dong Lijuan, a senior statistician with the NBS.

Food prices reversed the 0.1-percent gain in October to fall 0.8 percent month-on-month, lowering the monthly consumer inflation by about 0.14 percentage points, according to the data.

Specifically, the price of pork, a staple meat in China, edged down 0.7 percent in November from the previous month. Authorities have been releasing pork from the central reserves in recent months and hog production kept rising, Dong said.

Prices of fresh vegetables fell by 8.3 percent, compared with the 4.5 percent month-on-month drop in October, thanks to sufficient supply underpinned by good weather conditions, according to Dong.

Overall, the decline in food prices is mostly the result of ample supply rather than COVID-19 outbreaks, Wen Bin, Chief Economist with China Minsheng Bank, said in a co-authored research note.

Non-food prices rose 1.1 percent from a year earlier, unchanged from October. The prices of gasoline, diesel, and liquified petroleum gas went up by 11.4 percent, 12.3 percent, and 4.6 percent year on year, respectively.

The COVID-19 impact dented prices of consumer products and services. Flight tickets and hotel rooms cost 7.5 percent and 2.9 percent less, respectively, than in October, while cheaper durables like home appliances, vehicles, and communications gears point to subdued demand, said Wen.

Friday's data also showed that China's producer price index, which measures costs for goods at the factory gate, slid 1.3 percent year on year in November.

The decrease was flat with that registered in October. On a monthly basis, China's PPI gained 0.1 percent in November, moderating from the 0.2 percent increase in October.

Due to a high comparison base in the same period last year, the PPI continued a year-on-year decline in November, while rising coal, oil, and non-ferrous metal prices have led to the monthly PPI increase last month, according to Dong.

Factory-gate prices are likely to recover in the near future as demand for industrial products warms, according to Wen.

China had pledged efforts to further expand domestic demand and to give full play to the fundamental role of consumption and the key role of investment in 2023, according to a meeting convened by the Political Bureau of the Communist Party of China Central Committee on Tuesday.

The country is also optimizing the COVID-19 response with new measures introduced to minimize the epidemic's impact on economic and social development while protecting people's health.

Looking into the coming year, Wen said China's inflation is expected to remain tame, as overall social demand recuperates while imported inflation eases.