CPI eases as prices of food and oil dip
China's consumer prices eased in November thanks to declines in food and oil prices.
The Consumer Price Index, a main gauge of inflation, rose 2.2 percent year on year in November, pulling back from the 2.5 percent gain in October, according to data from the National Bureau of Statistics.
That was the first slowdown of year-on-year CPI growth in the second half of 2018. On a monthly basis, the CPI dipped 0.3 percent compared with a 0.2 percent gain in October.
Food prices fell 1.2 percent month on month in November, dragging down the CPI growth by 0.25 percentage points, NBS statistician Sheng Guoqing said.
Prices of fresh vegetables declined 12.3 percent due to abundant supply, while the price of pork dipped 0.6 percent, since pig supply accelerated in some regions because of concern over the African swine fever, Sheng said.
Li Chao, a researcher with Huatai Securities, forecast a low risk of inflation in the fourth quarter, saying food price fluctuations “had limited influence on the overall consumer inflation in the medium term.”
The CPI growth was also dragged down by the decline of oil prices. Prices of gasoline and diesel fell 4.9 percent and 5.2 percent month on month pulling down the CPI growth by 0.12 percentage points.
Consumer inflation will continue to soften since domestic demand, said Yang Yewei, an analyst with Southwest Securities.
For the coming year, Xiong Yuan, an analyst with Guosheng Securities, said China will not see much CPI inflation risk, which will offer more space for policy-makers to maneuver.
China is aiming to keep annual CPI growth around 3 percent this year, the same as the 2017 target.
The average year-on-year CPI growth for the first 11 months stood at 2.1 percent, unchanged from the first 10 months, according to the NBS.
The Producer Price Index, which measures costs for goods at the factory gate, rose 2.7 percent year on year in November, with the growth declining for five consecutive months.