Chinese inflation stays on track for Beijing

Photo: Getty/Lisa Lake

China’s consumer inflation came in above forecasts in April, after two months of slower growth.

The Chinese National Bureau of Statistics reported that yearly consumer price inflation (CPI) for April was 1.2%, above the 0.9% forecast.

That follows weaker growth in February and March of 0.8% and 0.9% respectively, which were the first reading below 1% since March 2015.

Monthly inflation rose a marginal 0.1%, but the result was positive as prices were expected to fall by 0.3% month-on month.

On the producer side, producer price inflation (PPI) cooled in April to 6.4%, which was below analyst forecasts of 6.9%. That’s a noticeable slowdown from 7.6 growth in the previous month as commodity prices crashed in April.

Reuters reports that the fall in PPI was the first decrease in seven months.

The 1.2% rise in CPI is broadly in line with Beijing’s inflation target, giving authorities room to tighten monetary policy to address credit risk without hindering economic growth too much.

The Shanghai Composite Index opened in positive territory this morning, up 0.2% a short time ago after falling by 2% over the past week.

More to come.

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