Inflation in China fell below 1% in March, far from the situation in developed countries, while factory-gate prices continued to fall, a sign of weak demand, according to official figures published on Tuesday.
The consumer price index (CPI), the main indicator of inflation, rose just 0.7% year-on-year in March, compared to 1% the previous month, according to the National Bureau of Statistics (BNS).
Analysts anticipated a faster acceleration (+2%), in a context of recovery in activity in China since the lifting of sanitary restrictions against Covid at the end of 2022.
Rising food prices
By way of comparison, inflation in France rose again in March to +5.6% annual and 5% in February in the United States.
The Chinese government is targeting average inflation of 3% by 2023, against a backdrop of rising world prices for raw materials and food. But since the Russian invasion of the Ukraine, China has been relatively spared from these increases.
In detail, food pushed prices up, especially fresh fruit (+11.5% in one year) and pork, by far the most consumed in the country (+9.6%).
For its part, the price of transport fuels fell by 6.4% in this period.
reduced margins
For its part, the producer price index (PPI) slowed down again in March (-2.5%), for the sixth consecutive month.
This is the weakest pace since June 2020 for this index, which measures the cost of goods leaving factories and provides an overview of the health of the economy. Producer prices in red mean reduced margins for companies.
“The recovery is on track, but it is not strong enough to push prices up,” said economist Zhiwei Zhang at Pinpoint Asset Management.
“This drop in inflation in China, at the end of the interest rate hike in the United States, reinforces the probability of a rate cut” in China to stimulate the economy, estimates Zhiwei Zhang.
China is aiming for a 5% growth target this year, one of the weakest in decades. Chinese Premier Li Qiang warned last month that it could be difficult to contact him.
Source: BFM TV
