China Producer Prices Fall For 48th Straight Month, But Consumers Doing Surprisingly Better

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China's producer prices fell for the 48th straight month due to China's economic slowdown and over supply in various industries, while the CPI clocked a 2.3 percent increase. In February 2016, Producer Price Index (PPI) for manufactured goods decreased 0.3 percent month-on-month, and decreased 4.9 percent year-on-year, according to a data from National Bureau of Statistics. The purchasing price index for manufactured goods decreased 0.5 percent month-on-month, and decreased 5.8 percent year-on-year. On average from January to February, the PPI decreased 5.1 percent year-on-year, the purchasing price index for manufactured goods fell 6.0 percent year-on-year. In addition, consumer price inflation rose higher than expected in February, driven by higher food prices during the Lunar New Year holiday.The consumer price index (CPI) went up by 2.3 percent year-on-year as cold weather and Spring Festival boosted vegetable prices. The food prices increased 7.3 percent, and the non-food prices rose 1.0 percent. The consumer prices increased 1.6 percent month-on-month. Economists say the upward trend in CPI is unlikely to sustain. HSBC chief China economist Qu Hongbin attributed the easing contraction to stabilizing commodity prices during the period. Qu pointed out that the rise in inflation was mostly caused by temporary factors, and downward pressure on non-food prices still looms large. "The deflationary risks see no significant easing," he noted. Related Link: http://english.cri.cn/12394/2016/03/10/3685s919885.htm "There's no need to worry about inflation," said Liu Dongliang, an economist with China Merchants Bank. "Before substantial improvements in the economy, weak demand will restrict room on inflation while the possibility for stagnation is also small." Related Link: http://www.scmp.com/news/china/economy/article/1922772/chinas-consumer-price-inflation-rises-23pc-more-expected-food
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