Consumer inflation surges to 7-year high in Oct as meat prices soar

China’s consumer inflation hit the highest level in more than seven years in October amid skyrocketing pork prices, official data showed over the weekend.

The consumer price index (CPI), a main gauge of inflation, rose 3.8 percent year-on-year in October, the highest level in 93 months, the National Bureau of Statistics (NBS) said. The index edged up 0.9 percent on a monthly basis.

The main factor behind the rise was a substantial increase in pork prices, and there is no risk of rising inflation across the board, Bank of Communications economists led by Lian Ping said in a research note sent to the Global Times.

The economists forecast the CPI to remain at elevated levels until the first quarter of 2020 and possibly top 4 percent year-on-year in some months.

Pork prices were up 101.3 percent year-on-year last month, pushing up consumer inflation by 2.43 percentage points. Livestock meat prices as a whole surged 66.8 percent year-on-year, contributing 2.92 percentage points to the October CPI rise.

Pork price-fueled consumer inflation accounted for nearly two-thirds of October’s CPI growth year-on-year, Shen Yun, a senior statistician at the NBS, said in a statement posted on the bureau’s website on Saturday. As measured monthly, the rise was more striking: pork prices soared 20.1 percent in October over September, contributing nearly 90 percent of the index’s gain, Shen said.

The producer price index went up 0.1 percent in October from September, but on a yearly basis, producer inflation contracted 1.6 percent last month.

Owing to weak domestic and foreign demand, producer inflation lacks upward momentum and will continue to decline, pointing to interim deflationary risks in the factory sector, the Bank of Communications economist said.