12 Sept 2017
China Sourcing Update: Major Price Indicators (Aug 2017)
1. CPI growth rises in August
The year-on-year growth rate of China’s consumer price index (CPI) went up from 1.4% in July to 1.8% in August, above market expectations (see exhibits 1 & 2).
The acceleration in the CPI growth in August was mainly caused by a lower base for comparison in August last year. The year-on-year growth in the food component in the CPI improved from minus 1.1% in July to minus 0.2% in August, and the year-on-year growth in the non-food component picked up from 2.0% in July to 2.3% in August.
Looking ahead, we expect the CPI growth to fall in September and stay low in the fourth quarter, due to a higher comparison base in September and the fourth quarter last year, as well as continued deflation in food prices.
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