| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| Month over Month | -0.4% | -0.2% | ||
| Year over Year | -0.1% | -0.7% | 0.1% | -0.1% to 0.1% |
Highlights
China's headline consumer price index fell 0.1 percent on the year in March after dropping 0.7 percent in February and fell 0.4 percent on the month after a previous decline of 0.2 percent. Food prices fell 1.4 percent on the year, partly offset by an increase of 0.2 percent in non-food prices. Producer price inflation data also published today showed ongoing weakness in price pressures.
Officials have lowered their target for annual inflation this year to two percent, down from three percent previously, and have also changed the monetary policy stance from"prudent" to"moderately loose". Global trade tensions and market volatility, however, have increased risks to the economic outlook for China and further complicated the policy decisions for officials.
Today's data were slightly weaker than the consensus forecast for a year-over-year increase of 0.1 percent in the CPI. The China RPI and RPI-P fell from plus 79 to plus 57 and was unchanged at 100 respectively, indicating that recent Chinese data in sum are still coming in well above consensus forecasts.
Officials have lowered their target for annual inflation this year to two percent, down from three percent previously, and have also changed the monetary policy stance from"prudent" to"moderately loose". Global trade tensions and market volatility, however, have increased risks to the economic outlook for China and further complicated the policy decisions for officials.
Today's data were slightly weaker than the consensus forecast for a year-over-year increase of 0.1 percent in the CPI. The China RPI and RPI-P fell from plus 79 to plus 57 and was unchanged at 100 respectively, indicating that recent Chinese data in sum are still coming in well above consensus forecasts.
Market Consensus Before Announcement
The consensus looks for CPI to show an actual increase of 0.1 percent on year in March after a 0.7 percent drop in February following many months of declines.
Definition
Consumer Price Index (CPI) is an index that measures changes over time in the price level of consumer goods and services purchased by residents, which reflects the overall changes in price level.
Description
Consumer prices account for a majority of overall inflation, which is carefully monitored by investors worldwide. Investors worldwide monitor Chinese price changes closely. A pickup in inflation could mean an increase in interest rates is in the offing from the People's Bank of China while an easing could mean looser monetary policy. The monthly CPI is broken down by 8 categories with more detail available on the following day including aggregate information by urban and rural areas and provinces.
The CPI measures the change in the level of prices for a specified basket of goods and services normally purchased by urban and rural residents. Approximately 226 areas throughout the country are covered, including 80 counties and 146 cities. The current CPI is an annually chained Laspeyres price index and has been available since 2001. From 1978 to 2000, the index was compiled using current year weights for most items.
The CPI measures the change in the level of prices for a specified basket of goods and services normally purchased by urban and rural residents. Approximately 226 areas throughout the country are covered, including 80 counties and 146 cities. The current CPI is an annually chained Laspeyres price index and has been available since 2001. From 1978 to 2000, the index was compiled using current year weights for most items.
