Data released by China's National Bureau of Statistics shows that the Consumer Price Index (CPI) for March 2024 grew by 0.1% year-over-year, a significant decrease from the previous value of 0.7%. In this breakdown, urban areas remained unchanged, while rural areas saw a 0.1% increase. Food prices fell by 2.7%, while non-food prices rose by 0.7%. Service prices increased by 0.8%, but the prices of consumer goods dropped by 0.4%.
Meanwhile, month-over-month data indicate that the CPI for March decreased by 1.0%, reversing the 1.0% increase from the previous month. This downturn, occurring after three months, is interpreted as being influenced by a seasonal decline in post-holiday consumer demand and an overall sufficient market supply.
A further analysis of detailed food price data shows that in March, the prices of food, tobacco, and alcohol categories decreased by 1.4% year-over-year, mainly affected by an 8.9% decrease in egg prices and a 2.4% decrease in pork prices. Prices for fresh vegetables dropped by 11.0% year-over-year, with pork prices experiencing a 6.7% month-over-month decrease. This contributed approximately 0.40 percentage points to the decline in CPI.
Apart from food, the year-over-year changes in the prices of the other seven major categories varied, with increases observed in the prices of other goods and services, education, culture and entertainment, and clothing, while the prices of medical care, daily necessities and services, and housing also rose.
In terms of industry, the Producer Price Index (PPI) for industrial producers decreased by 2.8% year-over-year and declined by 0.1% month-over-month, showing a slight improvement over the 0.2% decrease from the previous month. The PPI for the first quarter fell by 2.7% year-over-year, with purchase prices decreasing by 3.4%. Prices in the mining industry dropped by 5.8% year-over-year, while prices for ferrous metal materials decreased by 1.6% month-over-month. This data highlights the ongoing downward pressure in the industrial sector.
Economic data for March in China indicates a significant deceleration in the year-over-year growth rate of CPI and a turnaround to a declining trend month-over-month. The relatively ample supply of industrial products and the reduction in food prices have to some extent curbed the overall increase in CPI.
