BOFIT Weekly Review 2016/15
Is Chinese producer price deflation finally abating?
March consumer price inflation was unchanged from February at 2.3 % y-o-y. Core inflation (excluding food and energy prices) accelerated slightly to 1.5 %. A visible shift, however, seems to be occurring in the producer price trend. Producer prices were down nearly 6 % y-o-y at the end of last year, but down only 4.3 % in March. Moreover, while the on-year price change was still negative, producer prices in March rose from February. It was the first time an on-month rise had been seen since September 2013. If the new trend becomes established, it may dissipate many policy concerns related to the deflationary trend even at the global level.
Chinese price trends
Source: Macrobond