Chinese inflation reaches highest level since 2012

China's inflation rose at its fastest rate in almost eight years in October, boosted by rising pork prices caused by an outbreak of African swine fever, according to official data released on Saturday.

The Consumer Price Index (CPI) - an important indicator of retail inflation - reached 3,8% last month, according to the National Bureau of Statistics (NBS), up from 3,0% in September and the highest annual rate since January of 2012. .

Analysts in a Bloomberg News poll predicted a rate of 3,4%.

Prices for pork, the most consumed meat in China, more than doubled last year, according to NBS.

More than 1 million pigs have been slaughtered due to widespread outbreaks since African swine fever appeared in August of 2018, according to official statistics, but this is widely considered an underestimation.

This, in turn, also raised prices for other meats, including beef, chicken, duck and eggs, as consumers switch to other sources of protein.

The rise prompted the government to intervene to stabilize prices and secure supplies, according to the official Xinhua news agency.

"Chinese leaders are terrified of inflation," said Beijing-based research firm Trivium China, describing price increases as "one of the biggest drivers of the Tiananmen protests in 1989."

The inflation rate that year was 18,25%.

Meanwhile, producer prices had their biggest decline in more than three years, falling for the sixth consecutive month hit by the trade war with the United States.

The producer price index (PPI) - an important industrial barometer that measures the cost of products at the factory gate - contracted 1,6% in October from a year earlier, NBS said.

This occurred after prices shrank 1,2% in September and represented the largest decline since August of 2016.

Analysts in a Bloomberg survey predicted that producer prices would shrink by 1,5%.

Source: AFP / Jiji Press

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