The graph shows the inflation rate in China from May 2017 to May 2018. In May 2018, the inflation rate in China had ranged at 1.8 percent. The term inflation means the devaluation of money caused by a permanent increase of the price level for products such as consumer or investment goods. The Consumer Price Index shows the price development for private expenses and shows the current level of inflation when increasing. For comparison, inflation in India amounted to 4.75 percent as of 2017.
Inflation rate in China – additional information
Inflation rate is most commonly measured by the Consumer Price Index. A positive inflation rate reflects a rise in prices. Between 2004 and 2014, China only once experienced a deflation situation, with price levels decreasing by roughly 0.7 percent in 2009.
Monthly inflation in China between June 2013 and June 2014 was moderate compared to other emerging markets. During the first half of 2014, the monthly inflation rates of Brazil, Russia and India ranged from 5.5 percent to eight percent, while in China the figures were between 1.8 percent and 2.5 percent.
In China, there is a regional difference in inflation rates. As of September 2013, Tibet had experienced the highest CPI at 104.3 percent, while Shanghai reported a CPI growth of 2.5 percent. According to the National Bureau of Statistics of China, as of June 2014, inflation was mainly fuelled by a surge in food prices, as they had increased by 3.7 percent compared to previous year. The price gain in other non-food sectors was relatively slight. Tobacco and liquor prices even decreased by 0.6 percent compared with the year before.
Low inflation might be good news for consumers and businesses, but it also indicates slower expansion of the economy. As stated in research by IMF, GDP growth momentum in China has cooled down since 2010. With a population of more than 1.3 billion people, China outpaced Japan as the world’s second-biggest economy in 2010. According to a forecast by Goldman Sachs, China’s GDP will amount to about 32 trillion U.S. dollars in 2030, surpassing the United States as the world’s leading economic power.
