Level 2

Pork fuels Chinese consumer inflation as producer prices fall

By Sean Farrell

Date: Tuesday 10 Dec 2019

Pork fuels Chinese consumer inflation as producer prices fall

(Sharecast News) - Chinese consumer inflation hit a near-eight year high in November, fuelled by rising pork prices, but producer prices recorded their fifth month of annual declines as economic growth slowed.


The consumer price index rose 4.5% from a year earlier - the fastest increase since January 2012, the National Bureau of Statistics reported. The jump was driven mainly by a continued surge in pork prices as African Swine Fever took its toll on the country's pig herds.

The cost of pork more than doubled in November from a year before and prices are likely to remain high as China gets ready to celebrate the Lunar New Year.

November's increase exceeded analysts' average forecast of 4.2% and October's rise of 3.8%. However, core inflation, which excludes food and energy prices, rose only 1.4% and eased slightly from 1.5% in October.

China's producer price index (PPI) dropped 1.4% from a year earlier - slightly better than the 1.5% forecast in a Reuters poll and the 1.6% decline registered in October. The slightly better result may reflect recent hints of improved manufacturing activity but the Chinese economy remains susceptible to the country's trade dispute with the US and weak internal demand.

The twin trends of rising consumer costs and falling factory prices have caused a problem for Beijing as the government tries to steer the economy through weakening global demand and US President Donald Trump's imposition of tariffs. The Chinese authorities face calls to enact more stimulus to support economic growth after cutting interest rates and bringing forward government bond issuance from 2020.

Michael Hewson, market analyst at CMC Markets, said: "The latest data from China appears to show an economy that continues to struggle despite a pickup in recent PMI data. The latest inflation numbers showed that a 110% rise in pork prices continued to exert upwards pressure on headline CPI while factory gate prices have continued to remain under pressure indicating a lack of internal demand."

Special promo:
Trading the Forex Market? Visit FXmania.com to get advanced infomation about currencies and the Foreign Exchange Market.

..

Email this article to a friend

or share it with one of these popular networks:


Top of Page