China Faces Price Surge... Highest in 24 Months (Comprehensive)
July CPI up 2.7% YoY, Nearing Chinese Authorities' Target of 3%
PPI Rises 4.2%, Marks 9th Consecutive Month of Decline
[Asia Economy Senior Reporter Cho Young-shin] China's consumer price index (CPI) inflation rate in July reached its highest level in 24 months.
China's National Bureau of Statistics announced on the 10th that last month's CPI inflation rate rose 2.7% year-on-year. This is the highest figure since July 2020, when it was also 2.7%. The Chinese authorities' CPI inflation target for this year is around 3%.
China's CPI has shown a monthly upward trend, recording 0.9% in January and February, 1.5% in March, 2.1% in April, 2.1% in May, and 2.5% in June.
The National Bureau of Statistics analyzed that price increases centered on food led the CPI rise last month.
In fact, food prices last month rose 6.3% year-on-year, pushing up the CPI. Prices of fruits and vegetables increased by 16.9% and 12.9% respectively compared to the same month last year, directly impacting China's consumer prices.
Additionally, grains, eggs, and vegetable oils showed increases ranging from 3.4% to 7.4%.
Among non-food items, energy-related products such as gasoline rose significantly. Gasoline increased by 24.6%, diesel by 26.7%, and LPG by 22.4% year-on-year.
Considering the heavy rains concentrated in southern China, the country's CPI is likely to rise further next month. Since consumer prices are directly linked to public sentiment, the Chinese authorities' ability to control inflation is expected to come under scrutiny.
The producer price index (PPI), which affects the prices of China's export products, increased by only 4.2% year-on-year. On a monthly basis, the PPI has been declining for nine consecutive months since peaking at 13.5% in October last year.
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The National Bureau of Statistics explained that due to domestic and international factors such as the decline in international raw material prices last month, the PPI fell both year-on-year and month-on-month.
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