Slower Price Drops Hint at Easing Deflationary Pressures, Caixin Survey Shows
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China’s consumer and factory-gate prices likely remained in deflationary territory in October, though the rate of decline appeared to moderate, according to a Caixin survey of economists.
The consumer price index (CPI) is expected to have fallen 0.1% from a year earlier, the average forecast from 12 domestic and international institutions showed. That would mark a slight narrowing from September’s 0.3% decline. Forecasts ranged from a 0.3% drop to a 0.1% gain.
Producer prices also remained under pressure, with the producer price index (PPI) — which tracks factory-gate prices — estimated to have dropped 2.2% year over year. That would represent a modest improvement from September’s 2.3% decline.
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- China’s CPI likely fell 0.1% YoY in October, moderating from September’s 0.3% drop; PPI estimated to decline 2.2% YoY, a slight improvement from a 2.3% fall.
- Pork prices dropped 27.2% YoY, but higher fruit and vegetable prices and holiday demand offset some declines.
- Core CPI rose 0.1% MoM, while commodity prices diverged; steel weakened, coal stayed firm, and copper rose on supply issues.
- China International Capital Corp.
- China International Capital Corporation (CICC) provided several forecasts related to China's economic data. They reported that wholesale pork prices dropped by 27.2% year-on-year in October. CICC also offered an optimistic forecast of a 0.1% year-on-year increase in headline CPI, attributing it to slowing food price declines and consumer stimulus. Conversely, they projected a deeper 2.5% decline in the Producer Price Index (PPI), citing weak purchasing manager index readings and a sharper fall in global oil prices.
- Huachuang Securities
- Huachuang Securities is an institution that employs Zhang Yu, a chief macro analyst. Zhang Yu predicted that the core CPI, excluding volatile food and energy, would have increased by 0.1% from September, driven by holiday spending.
- Citic Securities
- According to the article, Citic Securities observed that prices of domestic commodities, such as steel, weakened due to regulatory uncertainty. However, coal prices remained firm. They also noted that globally priced commodities diverged, with copper rising due to supply disruptions and oil falling because of oversupply. Citic Securities expects the Producer Price Index (PPI) to show a 2.3% year-on-year drop.
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