China: Consumer Price Index (CPI) in China by sector and area January 2020
The graph shows the Consumer Price Index (CPI) in China as of January 2020, by sector and area. That month, the CPI for food, tobacco and liquor in urban areas resided at 114.2 index points.
Consumer prices in China – additional information
The Consumer Price Index (CPI) is an economic indicator that measures changes in the price level of a representative basket of consumer goods and services. It is calculated by taking price changes for each item in the market basket and averaging them. Goods and services are weighted according to their significance. The CPI can be used to assess the price changes related to the cost of living. It is also useful for identifying periods of inflation and deflation. A significant rise in CPI during a short period of time denotes inflation and a significant drop during a short period of time suggests deflation.
Annual projections of China’s inflation rate forecast by the IMF estimate a relatively low increase in prices up until 2018. The implications of low inflation are two-fold for a national economy. On the one hand, price levels remain largely stable which may lead to equal or increased spending levels by domestic consumers. On the other hand, low inflation signifies an expansion slowdown of the economy, as is reflected by China’s gross domestic product growth.
In 2019, consumer prices in China have risen steadily, with growing momentum in the last months. By comparison, producer prices have only increased slightly in the first half of the year and have fallen especially in the last months, as is shown by the monthly producer price index (PPI). The deflation trend and sudden changes in the PPI over the year reflect the uncertainties caused by the trade conflict between China and the United States.
Consumer prices in China – additional information
The Consumer Price Index (CPI) is an economic indicator that measures changes in the price level of a representative basket of consumer goods and services. It is calculated by taking price changes for each item in the market basket and averaging them. Goods and services are weighted according to their significance. The CPI can be used to assess the price changes related to the cost of living. It is also useful for identifying periods of inflation and deflation. A significant rise in CPI during a short period of time denotes inflation and a significant drop during a short period of time suggests deflation.
Annual projections of China’s inflation rate forecast by the IMF estimate a relatively low increase in prices up until 2018. The implications of low inflation are two-fold for a national economy. On the one hand, price levels remain largely stable which may lead to equal or increased spending levels by domestic consumers. On the other hand, low inflation signifies an expansion slowdown of the economy, as is reflected by China’s gross domestic product growth.
In 2019, consumer prices in China have risen steadily, with growing momentum in the last months. By comparison, producer prices have only increased slightly in the first half of the year and have fallen especially in the last months, as is shown by the monthly producer price index (PPI). The deflation trend and sudden changes in the PPI over the year reflect the uncertainties caused by the trade conflict between China and the United States.
