13 March 2018
China Sourcing Update: Major Price Indicators (Feb 2018)
Major Price Indicators
1. CPI growth jumps in February
The year-on-year growth rate of China’s consumer price index (CPI) went up from 1.5% in January to a four-year high of 2.9% in February, which was higher than market expectations.
The CPI reading in February continued to be distorted by the timing of the Chinese New Year, which fell in late January 2017 but started in mid-February this year. Due to a lower comparison base in February last year and a stronger demand for food and travel during and around the Chinese New Year holidays this year, the year-on-year growth in the food component in the CPI went up to 4.4% in February from minus 0.5% in January, and the year-on-year growth in the non-food component climbed to 2.5% in February from 2.0% in January.
Looking ahead, we predict that the CPI growth will drop in the coming couple of months, as both the food and non-food prices are likely to ease after the Chinese New Year holidays ended in late February.
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