China’s inflation largely unchanged in April

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/19

China’s National Statistics Bureau reports that consumer prices rose 2.3 % y-o-y in April and that 12-month core inflation (not including food and energy prices) was 1.5 %. China’s inflation rate has remained modest and quite steady in recent months, even if food prices climbed 7 % y-o-y. The slide in producer prices has moderated in recent months.

In earlier years, changes in food prices had a significantly larger impact on consumer prices. At the start of the year, the NBS revised the contents of its consumer basket on which it bases the consumer price index. The weighting of food in the basket has been reduced substantially, while housing, transport and healthcare services were given larger weights. Financial services were among the new items making their debut in the current basket formulation. The NBS adjusts its consumer basket every five years to reflect consumer habits. As households grow wealthier, it is typical that households devote a smaller share of their income to food.

Price trends in China
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Sources: China National Bureau of Statistics and Macrobond.

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