MNI DATA IMPACT: China Aug CPI Falls On Base Effect, Pork Price

China's August inflation decelerated to 2.4% y/y from 2.7% in July, slowing down after rebounding for two months, with the fall due to the high base for the same period last year. Analysts had expected 2.3% y/y.

Factory-gate prices narrowed year-on-year falls to register a five-month high as the prices for domestic industrial products kept rising on rebounding international commodity prices.

Here are the key takeaways from data released by the National Bureau of Statistics on Wednesday:

• Food costs decelerated to 11.2% y/y from 13.2% in July, accounting for 2.33 percentage points of the CPI gain.
• On a monthly basis, the CPI rose 0.4%, also moderating from July's reading of 0.6%.
• Pork prices, the main inflation driver in the past year, rose 52.6% y/y, sharply decelerating 33.1 percentage points from the previous month due to the base effect.
• Vegetable prices rose above trend due to hot and rainy weather, growing 11.7% y/y in August, compared with July's 7.9% gain.
• The PPI was -2.0% y/y, narrowing the 2.4% fall in July. The figure was in line with the forecast.
• The PPI grew 0.3% m/m, 0.1 percentage point slower than in the previous month, as prices of crude oil, iron ore and non-ferrous metals overseas continued to rise and prop up domestic industrial product prices.