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Chinese economy   Inflation fell from 2.3%

China: Inflation decelerates in December

China inflationIn December, consumer prices rose 0.2% from the previous month, following November’s 0.1% increase.

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The reading mainly reflected a strong increase in prices for transportation and health.

Inflation fell from November’s seven-month high of 2.3% to 2.1% in December. The decline slightly exceeded the 2.2% that market analysts had expected.

Inflation in 2016 averaged 2.0%, which was up from 2015’s 1.4% but well below the government’s 3.0% target for the year.

Meanwhile, producer inflation rose from November’s 3.3% to 5.5% in December, which represented an over five-year high.

The print was above the 4.6% expansion that the markets had expected. In 2016, the decline in producer prices averaged 1.4%, which was markedly up from 2015’s 5.9% drop.

FocusEconomics Consensus Forecast participants expect that consumer inflation will average 2.1% in 2017, which is up 0.1 percentage points from last month’s estimate.

In 2018, the panel sees consumer inflation inching up to 2.2%. Meanwhile, the panel expects producer inflation to be 0.6% in 2017, which is up 0.3 percentage points from last month’s projection. In 2018, panelists see producer inflation rising to 1.1%.

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