China Inflation At 3-Month High, Factory Gate Inflation Eases Notably

China's inflation accelerated to a 3-month high in April, while factory gate inflation eased on weakening commodity prices, data published by the National Bureau of Statistics showed Wednesday.

Inflation rose to 1.2 percent in April from 0.9 percent in March. Economists had forecast inflation to rise moderately to 1.1 percent.

Inflation was well below the government's target of around 3 percent for the whole year of 2017.

Non-food inflation rose to 2.4 percent from 2.3 percent. At the same time, food prices declined 3.5 percent, but slower than the 4.4 percent fall seen in March.

On a monthly basis, consumer prices edged up 0.1 percent, in contrast to a 0.3 percent fall in March. This was the first rise in three months.

Another report from the NBS showed that producer price inflation eased sharply to 6.4 percent in April from 7.6 percent in March. This was the lowest in four months. Prices were expected to rise 6.7 percent.

Month-on-month, producer prices fell 0.4 percent in April, reversing a 0.3 percent rise in March.

Capital Economics economist Julian Evans-Pritchard, said producer prices are set to fall again in May given that the rout in industrial commodity prices has deepened this month.

Further ahead, producer price inflation should continue to wane as policy tightening weighs on economic activity. The economist said the upshot is that hopes for a sustained reflation in China are fading.

by RTT Staff Writer

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