China inflation higher than expected

Beijing, March 10 (IANS) China’s consumer prices grew by 2.3 percent in February, up from January’s 1.8 percent, official data showed on Thursday.

The reading beat expectations as economists from the Bank of Communications and China Merchants Bank forecast a 1.8 percent increase in February, Xinhua news agency reported.

The consumer price index (CPI), a main gauge of inflation, grew 1.6 percent month on month, the National Bureau of Statistics (NBS) said in a statement.

Food prices, which account for one-third of the CPI calculation, soared 7.3 percent year on year while non-food inflation edged up by 1 percent.

Pork prices jumped sharply by 25.4 percent year on year, contributing to 0.59 percentage point of CPI growth, while vegetable prices skyrocketed by 30.6 percent, accounting for 0.86 percentage point of CPI growth.

NBS statistician Yu Qiumei said that vegetable and pork prices went up due to supply shock during a cold in February and demand for pork and transportation rose around the Lunar New Year holiday, while service prices had increased along with labour costs.

China’s Producer Price Index (PPI), which measures wholesale inflation, dropped for the 48th consecutive month to 4.9 percent year on year in February, narrowing from the 5.3 percent drop in January and 5.9 percent in December 2015.

Month on month, producer prices in February edged down 0.3 percent.

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