Chinese consumer price inflation held steady at around 2 % last year

Consumer prices on average were up 2.1 % y-o-y in 2018, which meant that China’s leadership achieved inflation below last year’s target ceiling of 3 %. 12-month inflation was 1.9 % in December.

Core inflation, with excludes food and energy, was 1.8 % in December and 1.9 % for all of 2018. Prices of food, which has a 32 % weighting in the consumer basket of items used to calculate China’ consumer price index, showed little variation last year.

Producer prices have fluctuated more than consumer prices. In December, the on-year rise in producer prices slowed to 0.9 %. Producer prices declined from November to December. Producer prices fell every year from 2012 to 2016. Despite a couple years of increase, the producer price index in December was at the same level as it was six years ago.

Chinese inflation trends

Source: Macrobond.