China’s consumer price inflation accelerated at the fastest pace in more than two years in September on food prices, while producer price inflation eased further, official data showed on Friday.
Consumer price inflation accelerated to 2.8 percent in September from 2.5 percent in August, the National Bureau of Statistics said.
Prices rose the most since April 2020 as expected by economists and inflation moved close to Beijing’s target of around 3 percent.
The increase in annual inflation was due to a rise in food inflation that is likely to prove temporary, Capital Economics’ economist Zichun Huang said.
Food prices gained 8.8 percent annually driven by pork prices and non-food prices moved up 1.5 percent.
Excluding food and energy, core inflation dropped to an 18-month low of 0.6 percent.
On a monthly basis, overall consumer prices moved up 0.3 percent, slightly slower than economists’ forecast of 0.4 percent.
Due to base effects and falling commodity prices, producer price inflation slowed sharply to 0.9 percent in September from 2.3 percent in the previous month, the NBS said in a separate communique. Prices were expected to rise 1.0 percent.
Month-on-month, producer prices were down 0.1 percent in September.
Consumer price inflation is unlikely to constrain the People’s Bank of China’s ability to support the economy, Capital Economics’ Huang said. Instead, the main constraint at the moment is the renminbi, which is close to its weakest level in over a decade.
“We don’t expect policy rate cuts until pressure on the currency eases,” the economist added.
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