China inflation accelerates for fourth month

BEIJING: China’s consumer inflation accelerated for a fourth month in September, with food prices jumping by the most since February, while the rise in households’ nonfood costs slowed.

The consumer price index rose 2.5% from a year earlier, according to data from the National Bureau of Statistics.

That was the same as forecast in a Bloomberg survey of economists, and faster than the 2.3% report in August.

The producer price index climbed 3.6%, compared with a 3.5% estimate and a 4.1% gain the previous month.

There has been increasing concern about the effect of rising prices in China since the summer, with floods and animal disease forcing food prices up as rents in major cities rise.

The continued slowdown of factory prices will also hurt company profits, where growth is weaker.

“Supply-side reform, oil prices and the ongoing trade war will continue to drive prices higher in the last quarter and the first months in 2019,” said Nie Wen, a Shanghaibased economist at Huabao Trust Co.

“The property market used to mop up excessive liquidity when monetary policy was eased in the past.

“Now with the curbs on home purchases remaining tight, monetary policy easing will likely be another driver for higher prices.”

Gains in the consumer price index still remain well below the government’s target ceiling of 3%.

Food prices accelerated by 3.6% from the same month last year. The latest data show prices of fresh veg- etables were up by almost 15%, fresh fruit rose more than 10%, and eggs were 7.1% more expensive. Pork prices, which had been rising recently due to a pig illness, dropped 2.4%.

“Manufacturing companies in the middle stream are facing great pressure, as they face higher purchase prices but aren’t able to pass on the hike to consumers, given retail sales have already shown sluggish growth,” Nie said. — Bloomberg