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China's inflation drops to 1.7 percent in September, as food and crude prices drop

2020/10/16 9:46:35   source:Global Times

China's consumer price index (CPI), a major gauge of inflation, rose 1.7 percent year-on-year in September, narrowing by 0.7 percentage points from August's increase, the National Bureau of Statistics said Thursday.

Analysts said a drop in some food and crude oil prices led to the tamed inflation last month.

Food prices increased 7.9 percent year-on-year in September, down 3.3 percentage points from August. Overall, food prices pushed the CPI increase up by about 1.69 percentage points in September, explained Dong Lijuan, a senior statistician at the NBS, adding that market conditions were generally orderly.

Pork price rose by 25.5 percent year-on-year in September. The rate of increase was a significant 27.1 percentage points lower than August.

Vegetable prices rose 17.2 percent in the month, while egg, chicken and duck prices went down by 17.7, 9.1 and 4.7 percent on a yearly basis, as did fruit prices, which were down 6.9 percent.

"The continued recovery of hog production and the increase of pork supply have caused pork prices to drop in some provinces and regions, which is a main reason for the drop of CPI," Liu Xuezhi, an economist at Bank of Communications, told the Global Times Thursday.

It is expected the CPI will be kept at bay through the end of the year, Liu noted.

The core CPI for September, if excluding food and energy products, rose 0.5 percent year-on-year, the same as the previous month.

In the non-food category, movie ticket prices rose 4.1 percent year-on-year in September as post-epidemic home consumption recovered, especially the cultural and entertainment consumption, according to Dong.

The producer price index (PPI) fell 2.1 year-on-year in September but rose 0.1 percent from the previous month, according to NBS data.

The lowered international crude oil prices have caused commodity prices in oil related industries to drop from the previous month, Dong said. Among them, the prices of petroleum and natural gas extraction industries fell by 2.3 percent, and the prices of petroleum, coal and other fuel processing industries fell by 0.5 percent.

"The PPI reading suggests that China's manufacturing activity is gradually recovering from the pandemic and it is expected that the prices drop will continue to narrow in the future," Liu said.

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