China September Consumer Price Inflation Rate 0%...Below Expectations

China's consumer price index (CPI) for September halted its upward trend after one month. There are analyses suggesting that concerns about deflation (falling prices) could be reignited.

According to the National Bureau of Statistics of China on the 13th, the CPI growth rate for September was 0% year-on-year. This was below both the previous month's CPI growth rate (0.1%) and market expectations (0.2%).

[Image source=EPA Yonhap News]

By category, food prices fell by 3.2%, while non-food prices rose by 0.7%. Goods prices decreased by 0.3%, whereas service prices increased by 1.3%.

The producer price index (PPI) for September fell 2.5% year-on-year. Although the decline narrowed compared to the previous month (-3.0%), it remained negative this month as well. China's PPI has recorded negative growth for 12 consecutive months since -1.3% in October last year.

While the decline in PPI has slowed, the halt in CPI growth after one month has raised renewed concerns about deflation in the market.

With China's economic indicators showing mixed signals, optimism and pessimism coexist regarding the future economic outlook. September exports fell 6.2% year-on-year, a slowdown in the decline compared to August (-8.8%). Imports in September also decreased by 6.2% over the same period, with the rate of decline narrowing compared to the previous month (-7.3%). Some speculate that the Chinese economy may have bottomed out and is rebounding, but the prevailing analysis is that the momentum for economic recovery remains weak.