Chinese language inflation indices disappoint in comparison with’s macroeconomic restoration

© Reuters.

From Gina Lee – Chinese factory gate prices fell more-than-expected in October, with weak fuel demand offsetting recovery in the retail and manufacturing sectors from their COVID-19-induced slump.

Data from the National Bureau of Statistics (NBS) released earlier in the day showed a consumer price index (CPI) and a producer price index (PPI) that disappointed. grew 0.5% yoy, up from 0.8% in’s forecasts and 1.7% in September, the slowest growth since October 2009. It fell 0.3% to fall below that Forecast and growth of 0.2% in September.

The value declined 2.1% year over year and missed the forecast 2.0% decline, but remained at the level of the 2.1% decline in September.

Consumer inflation also fell to an 11-year low, with pork prices halting a 19-month rise. The long period of growth is due to a lack of meat, which is popular across the country due to African swine fever. Prices fell 2.8% year over year in October, compared with a 25.5% increase in September.

Oil and gas production prices fell 4.9% in October from the previous month, while fuel processing costs fell 1.6%, NBS chief statistician Dong Lijuan said in a statement.

While the weak values ​​largely reflect fluctuations in volatile items, they also suggest that upstream demand for industrial goods remains weak overall, despite recent signs of small improvement.

However, some investors remained optimistic. The Chinese economy is likely to see modest growth for the full year and then pick up pace in 2021 as it cautiously hopes a COVID-19 vaccine will be available globally by then.

“We assume that both the CPI and the PPI will be subdued in the fourth quarter. However, due to the growing demand for the pandemic, inflation should recover again after the first quarter of 2021,” the ANZ market economist Zhaopeng Xing told Reuters.

“Consumer price inflation is likely to decline further in the short term as pork supply continues to recover after the African swine fever outbreak last year,” said Julian Evans-Pritchard, senior economist with Capital Economics in China, in a statement after the data was released XIng.

“Policymakers are likely to see through food price volatility and focus on the recovery in underlying inflation. Therefore, we do not believe that low headline inflation will prevent People’s Bank (of China) from raising interest rates over the next year, ”the note added.

The data follows Monday’s trading data which shows it is up 11.45% year over year to $ 58.44 billion but is up 4.9% year over year compared to forecast growth of 9.5% and the value of 13.2% in September.

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