Chinese Inflation Grows at Fastest Rate in Six Months
China’s consumer inflation rate grew at its fastest pace in six months in October as food prices rose, while producer prices accelerated to a near-five year high, exceeding expectations.
The consumer price index (CPI) rose 2.1% in October from a year earlier, compared with a 1.9% increase in September, the National Bureau of Statistics (NBS) said on Wednesday.
Analysts had expected a 2.1% gain, a Reuters poll showed.
Factory prices rose 1.2% on-year, the fastest pace since December 2011 after turning marginally positive in September for the first time in nearly five years. The reading handily beat forecasts for a 0.8% rise.
Stronger factory prices have helped boost industrial profits, relieving some pressure on companies squeezed by higher costs and weak demand.
China’s economy expanded at a steady 6.7% in the third quarter and looks set to hit Beijing’s full-year target, fueled by stronger government spending, record bank lending and a red-hot property market that are adding to its growing pile of debt.
A jump in food prices fueled faster consumer inflation in October. Food prices rose 3.7%, compared with a 3.2% gain in the previous month.
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Non-food prices inched up 1.7% versus September’s 1.6% gain.
On a monthly basis, consumer prices fell 0.1%. Prices for health care rose 4.8%, the fastest-rising CPI sub-category.
China’s producer price index is expected to continue to increase year-on-year in the coming months, statistics bureau spokesman Sheng Laiyun said in late October.
“I believe PPI in the coming months will continue to show positive growth year-on-year, but it could be volatile month-on-month,” Sheng told a group of foreign reporters.