BEIJING — China’s consumer inflation retreated mildly in September, weighed down by dropping food prices, while growth in factory-gate prices hit a six-month high on strong domestic demand for raw materials.
The consumer price index (CPI) grew 1.6 percent year on year in September, slowing from August’s 1.8 percent, but still faster than July’s 1.4 percent, the National Bureau of Statistics (NBS) said Oct 16. It was the eighth straight month for the main gauge to stay beneath the 2-percent mark.
On a monthly basis, the index was up 0.5 percent, slightly higher than the 0.4 percent seen in the previous month.
NBS statistician Sheng Guoqing attributed the milder inflation to lackluster food prices, which account for a significant part of the CPI calculation.
“Food prices declined 1.4 percent from a year ago, contributing 0.28 percentage point to the slowdown,” said Sheng.
Prices of pork, a staple meat in China, dragged down the whole sector with a loss of 12.4 percent.
Meanwhile, the increase in non-food prices picked up. Led by services including heath care and home rents, non-food prices gained 2.4 percent year on year. The pace quickened marginally from August’s 2.3 percent.
Health care prices jumped 7.6 percent from a year earlier, the biggest increase in around 20 years. Home rents and education, culture and entertainment product prices also saw marked increases.
Excluding food and energy prices, the core CPI increased 2.3 percent year on year last month, up slightly from August’s 2.2 percent. Economists believe the index, free from factors vulnerable to short-term supply changes, can better reflect long-term price trends.
For the first nine months of the year, the CPI climbed 1.5 percent from one year earlier, safely lower than the official target of 3 percent for the whole year.
In contrast with a tame CPI, China’s producer inflation, which has been soaring since the end of 2016, registered the fastest growth since April. The producer price index (PPI), which measures costs for goods at the factory gate, was up by a forecast-beating speed of 6.9 percent year on year in September.
The pace of PPI accelerated from 6.3 percent in August. On a month-on-month basis, the index was up 1 percent last month.
Prices in ferrous metal smelting increased substantially by 31.5 percent from a year ago, followed by 28.6 percent for coal mining and 20.2 percent for non-ferrous metal smelting.
For the January-September period, the PPI climbed 6.5 percent year on year, an encouraging sign for an economy seeking to renew growth momentum amid lingering downward pressures.