China's CPI moderated in March to 0.7%, its lowest level since 2021

MADRID, 11 Abr.

China's CPI moderated in March to 0.7%, its lowest level since 2021


The year-on-year inflation rate in China stood at 0.7% last March, representing a moderation of three tenths with respect to the 1% rise in prices in February and the lower rate of price increases for life since September 2021, as reported by the National Statistics Office (ONE).

The core inflation rate, which excludes the impact of the volatility of energy and fresh food prices, stood at 0.7% year-on-year in March, one tenth above the reading of the previous month.

In monthly data, the Chinese inflation rate recorded a decline of 0.3% in the third month of the year in relation to the month of February, when it had fallen 0.5% per month.

In March, the price of food, tobacco and alcohol increased by 2.1% year-on-year, including an increase of 11.5% in the price of fruit and 7.8% in that of eggs, while the The price of cattle meat increased by 4.6%, with a rise of 2% for pork. Likewise, the price of fresh vegetables fell by 11.1%.

On the other hand, the prices of industrial production in China registered a new setback in March, falling by 2.5% year-on-year, compared to the fall of 1.4% in February, which represents the largest decrease in the last 33 months.

"We think inflation will pick up in the coming months as the labor market tightens again and will peak at 2.3% in early 2024," said Zichun Huang, an economist at Capital Economics, warning that the rate " it will be well below the government ceiling of around 3%" and thus the price increase will be much smaller than seen in other countries after reopening.

In this way, given that inflation will remain below the ceiling foreseen by Beijing, the expert believes that the People's Bank of China will keep its monetary policy unchanged.