MNI BRIEF: China March CPI Softens, PPI Declines

China's Consumer Price Index rose 0.7% y/y in March, 1pp off market expectations and down from February’s 1% y/y change due to higher fresh produce supply and lower energy and automobile prices, according to data from the National Bureau of Statistics.

Food costs increased 2.4% y/y, down 0.2pp from February as vegetable prices dropped by 11.1% y/y, 7.3pp lower than last month. Pork prices, the main CPI driver, rose 9.6% y/y, higher than the prior month's 3.9% y/y increase. Food costs contributed 0.43pp to CPI. Industrial consumer good prices declined 0.8% y/y compared to a rise of 0.5% y/y last month.

Service prices increased 0.8% y/y, up from the 0.6% y/y in February, due to higher airfares and tourism costs, the NBS said. Core CPI, which excludes food and energy prices, rose 0.7% y/y in March, up 0.1pp from last month. On a monthly basis, CPI fell 0.3% m/m compared with February's 0.5% m/m decline.

The producer price index declined 2.5% y/y from February's 1.4% y/y drop, according to the NBS. The reading was in line with the market consensus of a 2.5% y/y decline. PPI was unchanged m/m due to the swift recovery among factories and weaker commodity prices, the NBS said.