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China Sourcing Update (Major Price Indicators) Nov 2016

  1. CPI growth inches up in November

    The year-on-year growth rate of China’s consumer price index (CPI) rose slightly from 2.1% in October to 2.3% in November, higher than market expectations (see exhibit 1 and 2).

    The acceleration in CPI growth in November was mainly attributable to the rise in the year-on-year growth in the food component in the CPI, which came in at 4.0% in November after registering 3.7% in October. For example, the year-on-year growth in vegetable prices, a major driver of China’s inflation, increased further to 15.8% in November from 13.0% in October. Meanwhile, the year-on-year growth in the non-food component in the CPI edged up from 1.7% in October to 1.8% in November.

    Looking ahead, we believe that the food inflation has peaked and will fall in the near future, due to the recent stabilization of pork prices and vegetable prices; and we expect the non-food inflation to stay around the current level in the near term, unless the domestic demand improves significantly. Overall, in our view, the CPI growth is likely to slow in the coming months.

    China-Sourcing-Update-Major-Price-Indicators-Nov-2016.jpg

    To view the full article, please go to page top to download the PDF version.

Content provided by Fung Business Intelligence
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