Inflation rate in China 2010-2026

In 2020, the average inflation rate in China ranged at around 2.5 percent compared to the previous year. Projections by the IMF published in April 2021 expect the inflation rate to reach about 1.2 percent in 2021. The monthly inflation rate in China remained on a low level recently.

Calculation of inflation

The inflation rate is calculated based on the Consumer Price Index (CPI) for China. The CPI is computed using a product basket that contains a predefined range of products and services on which the average consumer spends money throughout the year. Included are expenses for groceries, clothes, rent, power, telecommunications, recreational activities, and raw materials (e.g. gas, oil), as well as federal fees and taxes. The product basked is adjusted every five years to reflect changes in consumer preference and has been updated in 2020 for the last time. The inflation rate is then calculated using changes in the CPI. As the inflation of a country is seen as a key economic indicator, it is frequently used for international comparison.

China's inflation in comparison

Among the main industrialized and emerging economies worldwide, China displayed comparatively low inflation among emerging countries in 2020. Nevertheless, it still ranged marginally above the inflation rates of established industrialized powerhouses such as the United States or the European Union. According to IMF estimates for 2020, Venezuela is expected to be the country with the highest inflation rate, with a consumer price increase of about 6,500 percent compared to 2019. Qatar is estimated to have the lowest price increase worldwide with prices actually decreasing by about 2.2 percent.