• China February CPI +3.2% y/y (vs. +3.0% expected); the CPI is now at a 10-month high
  • Food price component +6.0% y/y (a 9-month high)
  • CPI +1.1% m/m (vs. +0.8% expected)
  • Its unclear how much distortion was cause by the late Lunar New Year (February this year, January last year)
  • “Consumer-price gains may moderate in March as the impact of the holiday fades and better weather boosts production of agricultural products including vegetables, the statistics bureau said in a separate statement on its website.”
  • China has set an inflation goal of 3.5% for this year (compared to 2.6% in 2012)

The nation may need to raise interest rates should CPI gains stay at more than 3.5 percent for three months, Chen Dongqi, a senior researcher affiliated with China’s top planning agency, said March 7. Qian Yingyi, an academic adviser to the central bank, said a rate increase can’t be ruled out for 2013, the Shanghai Securities News reported March 6.

On the PPI:

  • Down 1.6% in February y/y (also -1.6% in January), the 12th consecutive decline
  • +0.2% m/m for February