CPI and PPI higher than expected in March

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The IPP producer price index and the CPI consumer price index were expected to rise further in March due to base effects.

The data have arrived as follows:

  • IPC: + 0.4% over the previous year (Reuters survey + 0.3%).
  • IPC: -0.5% from the previous month (Reuters survey -0.4%).
  • Food CPI: -0.7% compared to the previous year.
  • Non-food CPI: + 0.7% compared to the previous year.
  • PPI: + 4.4% over the previous year (Reuters survey + 3.5%)
  • PPI: + 1.6% compared to the previous month.

About the CPI consumer price index

The Chinese consumer price index is published by the National Bureau of Statistics of China and measures the average price change of a basket of goods and services. The CPI is the main element for measuring inflation and changes in buying trends. If the consumer price index rises substantially, it indicates that inflation has become a destabilizing factor for the economy, which may prompt the People’s Bank of China to adjust monetary policy and fiscal risk. Generally, a high result is positive or bullish for the CNY, while a lower reading is negative or bearish.

About the IPP producer price index

The Producer Price Index (PPI), published by the Chinese National Bureau of Statistics, is an estimate of the rate of inflation experienced by producers. The report shows the changes in the prices of raw materials in all its phases until the finished product is achieved. Generally a favorable reading is considered positive (or bullish) for the CNY, while an unfavorable reading is considered negative (or bearish) for the CNY.

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