China’s consumer prices remain flat in September, below expectations

China’s headline inflation was flat in September, weighed by a steep drop in pork and vegetable prices as well as high base effects.

The consumer price index was flat on year, compared with a 0.1% rise in August, the National Bureau of Statistics said on Friday.

The reading was below the 0.2% increase tipped by economists in a Wall Street Journal poll.

Food prices fell 3.2% on year in September, compared with a 1.7% decline in August. The statistics bureau said the food price and headline CPI readings were dwarfed by high bases a year earlier. Prices of pork and fresh vegetables widened their falls, dropping 22.0% and 6.4% on year respectively in September, accounting for nearly 90% of the decline in overall food prices, the bureau said.

Non-food prices rose 0.7% from a year earlier in September, compared with a 0.5% increase in August.

China’s core CPI, which excludes volatile food and energy prices, rose 0.8% on year in September, staying at the same level for a third month.

On a monthly basis, China’s CPI increased 0.2% in September, compared with August’s 0.3% growth.

Meanwhile, producer prices stayed in deflation but declined at a slower pace.

China’s producer price index, which gauges the price of goods sold by manufacturers, fell 2.5% on year in September compared with August’s 3.0% drop. In the WSJ survey, economists had projected a decline of 2.4%.

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