Gasoline and diesel prices in China have surged by 14.9% compared to last year, yet the consumer price index (CPI) rose only 0.9%. While international oil prices are pushing up production costs, sluggish domestic consumption and falling food prices are limiting the impact on consumer inflation.
The National Bureau of Statistics of China announced on October 14 that the CPI for September increased by 0.9% year-on-year. This marks a slight rise from 0.8% in August, but it fell short of the 1.0% forecast compiled by Reuters. Month-on-month, the increase was 0.2%, below the market expectation of 0.3%.
Consumer prices remained low due to a decline in food prices. In September, food prices dropped by 1.7% year-on-year, with pork and fresh vegetable prices falling by 10.0% and 8.1%, respectively. Non-food prices increased by 1.5%. Excluding food and energy, the core CPI rose by 1.0% compared to the previous year. The overall low inflation, despite rising energy prices, indicates that consumer demand in China is still weak.
In contrast, the producer price index (PPI) rose by 5.0% year-on-year, surpassing the 3.8% increase in August and exceeding the market forecast of 4.5%. The rise in international oil and raw material prices is reflected in factory gate prices, increasing inflationary pressure at the production level. Reuters noted that energy supply concerns related to the conflict in the Middle East have intensified inflationary pressures.
* This article has been translated by AI.
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