China consumer price inflation hits 18-month low
China’s consumer price inflation hit the slowest pace in March since September 2021, according to data released on Tuesday by the National Bureau of Statistics.
CPI slowed to 0.7% year-over-year from 1% growth in February, versus consensus expectations for it to be unchanged.
The figures showed that food price inflation slowed to 2.4% in March from 2.6% a month earlier. Non-food prices rose 0.3% on the year in March, down from 0.6% growth in February.
Meanwhile, PPI fell 2.5% in March after declining 1.4% the month before. This was in line with expectations and marked the fastest pace of decline since June 2020.
Zichun Huang, China economist at Capital Economics, said: "We think consumer price inflation will rebound in the coming months as the labour market tightens again and will peak at 2.3% in early 2024. But it will be well below the government’s ceiling of “around 3.0%”, and the increase in inflation will be far smaller than what was seen elsewhere when they opened up.
"The reports presented at the National People’s Congress (NPC) appear to share our sanguine view on inflation, highlighting that China has ‘a solid foundation for stable prices’. With inflation set to remain below the government's ceiling, we expect the PBOC to keep policy rates unchanged."