China’s Consumer and Producer Inflation Beat Forecast in August
(Beijing) — Inflation at the factory gates rebounded in August after being stabilized for three consecutive months as consumer prices picked up to the second highest level in the year, official data showed Saturday.
The producer price index (PPI) — a measure of prices at the factory gate — rose 6.3% year-on-year in August, after staying unchanged at 5.5% from May to July, the National Bureau of Statistics (NBS) said Saturday.
The consumer price index (CPI) — a gauge of prices of a basket of consumer goods and services — was up 1.8% last month from a year ago, as Chinese people expanded their spending on entertainments and education, medical care and living, pushing CPI to its second highest level this year.
Both figures were higher than forecasted. Analysts polled by Reuters had expected PPI would increase 5.6% and that CPI would rise 1.6% in August on an annual basis.
On a month-on-month basis, both PPI and CPI remained in the positive territory for the second consecutive month. Producer inflation hit the strongest level this year with a gain of 0.9%, 0.7 percentage points higher than July, on “higher prices of steel and non-ferrous metal,” according to Sheng Guoqing, an analyst with NBS.
Consumer inflation picked up 0.4% in August from July on rising food and nonfood prices. Fresh vegetable prices were up 8.5% due to higher logistic costs affected by high temperature and rainy weather during summer. Egg prices were up 16.2% due to reduced production.
The year-on-year producer inflation was largely lifted by higher prices in middle-to-upstream industrial sectors such as ferrous and non-ferrous metal processing, oil processing, coal mining and chemical product manufacturing, according to the analyst with NBS.
Domestic steel and coal prices have been soaring since Beijing ordered a cut in overcapacity last year to shut down steel mills and coal mines, fueling a squeeze in supply of the materials.
Several state-owned steel companies reported their net profits doubled during the first half of the year on strong sales and rising product prices.
The average profit rate was 4.1% in June for company members of the government-affiliated China Iron and Steel Industry Association, highest level since 2012.
Contact reporter Pan Che (firstname.lastname@example.org)
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