China’s CPI up 2.7% year-on-year in May, hitting 15-month high: official data

Source:Global Times Published: 2019/6/12 13:43:47

China's consumer price index (CPI), a main gauge of inflation, rose 2.7 percent in May from the same period in 2018, hitting a new high record for the past 15 consecutive months, official data showed Wednesday.

May's reading, in line with market expectations, was up from the 2.5-percent expansion in April, according to the National Bureau of Statistics (NBS). 

It is notable that food prices have been rapidly rising. In May, food prices increased 0.1 percent from the previous month, among which fruit prices surged 10.1 percent, the NBS data showed. Compared with the same period in 2018, fruit prices soared 26.7 percent, contributing 0.48 percentage points to the overall year-on-year CPI increase. 

Dong Yaxiu, an official from the NBS, said the hike in fresh fruit prices is attributable to the sharp drop in the output of apples and pears last year, resulting in this year's shortage. 

Liu Xuezhi, an economist at the Bank of Communications, said that the 2.7-percent year-on-year increase in CPI is within estimation and will not affect future monetary policy as it is still under the 3-percent bar. 

Liu also agreed that apart from carryover effects, the rising food price is the main driver behind the upsurge in CPI in May, including the price of fruit and pork. 

With an expected drop in the live pig supply in the market, pork prices may drive future year-on-year CPI increases above 3 percent in certain months, Liu said, noting that with an increase in fruit supply from June, overall CPI growth in 2019 is expected to be contained under 3 percent.

"With the mild growth rate of non-food products and core inflation, there is no obvious risk of inflation," Liu said. 

China's producer price index, which measures costs for goods at the factory gate, increased 0.2 percent in May from the previous month and rose 0.6 percent compared to the same period in 2018.

Posted in: ECONOMY

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