10.03.202004:01:00UTC+00China Inflation Eases; Producer Prices Turn Negative

China's consumer price inflation slowed slightly in February on slowing non-food price growth and producer prices returned to deflation as factory shutdowns after corona virus outbreak lowered demand.

Consumer prices advanced 5.2 percent on a yearly basis in February, slower than the 5.4 percent increase seen in January, data published by the National Bureau of Statistics showed Tuesday. The rate came in line with expectations.

Food prices surged 21.9 percent due to sharp 135.2 percent increase in pork prices. At the same time, non-food prices climbed only 0.9 percent.

The sudden outbreak of corona virus had a complicated impact on the price trend, the NBS said in a statement.

The increase in food prices reflects transportation control implemented across the country. The shortage of manpower disrupted supply and increased cost, the NBS noted. The coronavirus outbreak is putting downward pressure on inflation, Julian Evans-Pritchard, an economist at Capital Economics, said. While supply chain disruptions have kept food prices high, weaker demand has weighed on the price of other goods and services.

On a monthly basis, consumer prices gained 0.8 percent, slower than the 1.4 percent rise in January.

Another report from NBS showed that producer prices declined 0.4 percent annually in February, in contrast to a 0.1 percent rise a month ago. Prices were forecast to fall 0.3 percent.

Month-on-month, producer prices fell 0.5 percent in February.