China, the world’s second-largest economy, saw the release of strong economic data this week, indicating the country’s economic rebound is continuing.
Increases in consumer prices and a decline in factory prices all indicate that China’s economic recovery is very much on track.
China’s Consumer Prices Increase in December
The National Bureau of Statistics reported this week that the consumer price index in China increased by 0.2% in December from a year earlier. Last month’s increase followed a 0.5% fall in November.
Analysts had expected the December figure to remain unchanged.
Pork prices, a key component of China’s CPI basket, declined 1.3% last month from a year earlier after plummeting 12.5% the month before.
Chinese Producer Price index (PPI) Falls at Slowest Rate in 10 Months
The National Bureau of Statistics also reported this week that the Chinese producer price index (PPI) declined 0.4% from a year earlier.
The PPI was expected to fall by 0.8% according to analysts’ expectations. December’s surprise figures follow a 1.5% decline in the previous month.
Meanwhile, monthly PPI increased at its fastest pace in four years.
Capital Economics senior China economist Julian Evans-Pritchard told Reuters:
“With economic activity set to remain strong and underlying inflation likely to continue rising, we think the PBOC will tighten policy this year.”
Zhang Yongjun, analyst at China Centre for International Economic Exchanges commented:
“Judging from the current significant rebound in global commodity prices, (annual) PPI could soon enter positive growth territory.”
