China’s April inflation blew past expectations and accelerated from March. Consumer prices rose 2.8% year over year, which surpassed economists’ expectations of 2.7% according to the Wall Street Journal. April’s inflation rate was higher than the 2.4% increase in March, and as shown below is the highest inflation rate since the global recovery began in early 2009.
Property prices for 70 major Chinese cities also rose 12.8% on average, year over year. This rise was faster than March’s 11.7% increase according to China’s National Bureau of Statistics.
It could be that recent efforts to cool China’s property market will temper future inflation readings, but the accelerating uptrend certainly deserves attention and makes a Chinese rate hike and/or yuan adjustment more likely to come sooner rather than later. You definitely don’t want to see China extend the current inflation trend shown above.
(The chart above was built with data from Trading Economics)