MNI DATA IMPACT: China Feb CPI Fell Again; PPI Over 2-Yr High

China's inflation fell 0.2% y/y in February due to the higher comparison base with the same period last year.

The result compared with the previous month's 0.3% decline and was basically in line with the median forecast of -0.3%.

The Producer Price Index, another key indicator measuring factory gate prices, rose further to 1.7% y/y from last month's 0.3% gain, outshining the 1.3% forecast and registering the highest since December 2018, according to data released on Wednesday by the National Bureau of Statistics.

Here are the key takeaways:

• Food prices fell 0.2% y/y, reversing January's 1.6% gain, dragging down the headline CPI by 0.05 percentage points.
• Pork prices, the main inflation driver in the past year, fell 14.9% y/y on the high base last February, further expanding the previous 3.9% decline. The increased hog slaughter also drove down the prices on a monthly basis to fall 3.1% y/y, reversing January's 5.6% gain.
• The CPI grew 0.6% m/m, decelerating from the 1.0% gain in January, due to moderate price gains in food and services during the Chinese New Year holiday.
• The core CPI, excluding food and energy prices, was 0.0% y/y in February, recovering from the previous 0.3% fall.
• The PPI grew 0.8% m/m, slowing down from the 1.0% reported last month, as domestic demand continues to improve and prices of international commodities including crude oil and metals continue to rise.