China’s producer price index posted the smallest monthly rise since November 2016 last month while consumer price growth remained roughly stable, taking pressure off the People’s Bank of China to implement policies to rein in inflation, the South China Morning Post reports. This will allow the government to focus on campaigns against industrial overcapacity and pollution.
The producer price index rose 4.9% in December from a year earlier. This was slightly higher than an expected 4.8% increase predicted by a Bloomberg survey, but much lower than the 5.8% rise posted in November.
The consumer price index climbed 1.8%, according to the SCMP, compared with a median forecast of 1.9 per cent.
“Price pressures remain contained in China, easing pressure on the PBOC to tighten policy,” Frederic Neumann, co-head of Asian economics research at HSBC Holdings in Hong Kong, told the SCMP. “Cooling PPI inflation reflects slowing construction activity, while at the consumer level pricing power continues to be constrained.”