China inflation hits three-month high in March
Inflation in China hit a three-month high in March amid supply chain issues and Covid lockdowns, and following Russia’s invasion of Ukraine, according to data released on Monday by the National Bureau of Statistics.
Annual consumer price inflation rose to 1.5% from 0.9% in February, coming in above analysts’ expectations of 1.2%.
Meanwhile, producer price inflation fell to 8.3% on the year in March from 8.8% in February, coming in above forecasts for an 8.1% jump.
Craig Botham, chief China+ economist at Pantheon Macroeconomics, said: "China is not entirely immune to global price shocks, despite an enviably low rate of inflation compared to almost every other major economy. Rising food and energy prices proved more than enough to offset weaker core inflation in March, though the food story is at least partially about base effects.
"Food inflation in March was -1.5%, up from -3.9% in February, despite lower pork prices, as vegetable and grain prices rose. For now, food is still a drag on overall inflation, but that drag is decreasing, and we expect a positive contribution from April onwards. Energy inflation is not reported, but we estimate it rose to 31.7% in March, from 27.6% in February, to contribute 1.0% to total headline inflation, up from 0.8% previously.
"We expect inflationary pressure from energy to hit a peak in April and then subside, given the retreat of international oil prices and a gradually rising base for comparison."