Fundamental Report 12/04/2017
China Consumer Price Index
The Consumer Price Index (CPI) for February decelerated to the slowest pace in over 2 years. In contrast, the Producer Price Index rose 7.8 percent in February compared with 2016 figures, surpassing consensus estimates. It is expected that the rise in producer prices will filter through to consumer prices. In general, consumer prices are, in fact, rising as demonstrated by increasing commodities prices, services prices and rental costs.
The drop in consumer inflation for February has been attributed to falling food prices and slowing demand during the Lunar New Year and colder weather conditions, according to the National Bureau of Statistics. Inflation figures are within the 1-3% guidance set by the People’s Bank of China (PBC). PBC Governor, Yi Gang, stated ahead of the annual National People's Congress last week that the bank expected CPI to fall between 2% and 3% for 2017.
Event:
China Consumer Inflation, 12th April 2017, 08:30 GMT+8.
- Consensus estimates from Reuters suggest CPI is expected to rise by 1% year-on-year in March, slightly above the 0.8% growth seen in February.
- According to the Caixin China Composite Index, March represented the second consecutive month of increase in payrolls after declining for almost two years.
- Consumer demand has been hampered by poor income growth, as average annual GDP per capita remains below ¥55,000.
Chinese retail sales slowed compared to December 2016, rising by 9.5 percent year-on-year for both January and February. However, steady growth should be reflected in consumer prices.
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