China’s CPI rose 0.7% year-on-year in October

The National Bureau of Statistics of China announced on the 9th that in October, China’s consumer price index (CPI) rose by 0.7% year-on-year, a decrease of 0.2 percentage points from the previous month.

Among them, gasoline prices rose by 22.4% year-on-year, an increase of 5.8 percentage points from the previous month, affecting the CPI to increase by approximately 0.63 percentage points year-on-year, driving the increase in energy prices to expand from 7.3% last month to 9.9% this month.

Prices of industrial consumer goods excluding energy increased by 1.2% year-on-year, 0.4 percentage points lower than the previous month. Among them, the prices of data storage equipment, tablets, computers and mobile phones increased by 45.4%, 29.3%, 23% and 16.7% respectively. The four items combined affected the CPI to increase by about 0.26 percentage points year-on-year.

Service prices increased by 0.7% year-on-year, a decrease of 0.1 percentage points from the previous month. Among services, the price of medical services increased by 3.6%; the price of travel services increased by 1.5%. Food prices fell by 2.9% year-on-year, and the decline expanded by 1.2 percentage points from the previous month. Among foods, the prices of fresh vegetables, pork and fresh fruits fell by 16.9%, 8.6% and 3.8% respectively.

Pang Ming, a member of the China Chief Economist Forum, said that although the prices of fresh vegetables, fresh fruits and pork are still at a low level, prices in transportation and communications, medical care, education, culture and entertainment and other services and non-food fields have maintained a moderate upward trend, reflecting that service consumption and some upgraded consumer demand are still resilient.

He also mentioned that in October, China's core CPI, excluding food and energy, rose 0.8% year-on-year, indicating that consumer prices generally maintained a moderate growth trend and the demand side remained stable.

From a month-on-month perspective, China's CPI in October remained flat from an increase of 0.2% in the previous month. Among them, the price of industrial consumer goods increased by 0.3%; the price of services turned from a decrease of 0.2% in the previous month to an increase of 0.1%; the price of food turned from an increase of 0.4% in the previous month to a decrease of 1%.

Looking forward to China's price trends in the later period, Pang Ming believes that prices are expected to continue to recover moderately. Especially with the continued implementation of policies to expand domestic demand, the release of consumer subsidy effects, and the steady recovery of service consumption, core CPI is expected to maintain smooth operation.