China’s CPI up 1.9%, PPI rise 0.9% in December

China's consumer prices and producer prices rose weaker-than-expected in December, bearing indications to weakness on China's economic growth.

China’s consumer prices gained 1.9% in December on a year-on-year basis, rising slower than economists’ expectations. The state’s producer prices for December also reflected a weaker-than-expected increase amid China’s slackening economic growth.

Consumer Price Index (CPI) for December eased from the 2.2% increase in November, China’s National Bureau of Statistics said on Thursday. Analysts had expected a 2.1% gain for December.

Prices of industrial products for the domestic market slackened from the previous month, with the Producer Price Index rising 0.9% in December year-on-year, far lower than the 1.6% increase analysts had expected. In November, producer prices were up by 2.7%.

Experts had predicted a slower rise in producer prices amid slacking economic momentum, soft demand, lower commodity costs, and China's ongoing trade conflict with the United States. For the third quarter of last year, China’s economy grew at the weakest pace since the first quarter of 2009.

Sliding factory prices would lead to an erosion in industrial profits, adding headwinds to firms and posing a challenge on their loan repayments.

China’s consumer inflation target for last year was at 3.0%, in the same pace of increase as the previous year. The government had said that consumer prices are expected to be on a reasonable pace of increase, with no sudden surprises.

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