China’s consumer price index records the highest in November since 2012

With the ongoing trade war between the two largest economies of the world, the United States of America and China, the economies have remained of interest for investors and analysts alike. The economic data that provides insight into the two economies have directed movements in global financial markets in the past months.

Earlier on Tuesday morning, China’s National Bureau of Statistics (NBS) announced two significant reports that provided insight into the country’s economic outlook. Producer price (PPI) and consumer price (CPI) indices were revealed at 01:30 GMT on Tuesday.

PPI Dropped By 1.4% In November As Compared To 2018

As per the report, China’s PPI dropped by 1.4% in November as compared to the last year. The figure, however, was printed better than the analysts’ forecast as well as October’s report. China had printed a 1.6% decline in factory gate prices in October, following which, experts had estimated November to see another 1.5% drop in the PPI. Noting 1.4% in November, while the data represents that the PPI continued to drop (year-over-year), a slight improvement on a monthly basis, however, was evident in the NBS report.

The consumer price index (CPI), on the other hand, recorded contradictory results. China’s CPI had registered a 3.8% growth in October. Following October’s report, analysts had estimated the CPI to extend its hike to 4.2% in November. Beating both the last month’s figure and the experts’ forecast, NBS reported November’s CPI at 4.5% that hinted at the rising inflation in China. The report further highlighted that November’s data marked the fasted growth in inflation since 2012.

Slumping Exports And Weak Demand Cited As The Reasons For Poor Data

The National Bureau of Statistics cited slumping exports and weak demand to have contributed to the rise in inflation. Tuesday’s economic data, as per the analysts, further suggests that there is a dire need for China to add more stimulus to boost its economy. Being the world’s largest consumer of pork, a 110.2% increase in pork price as compared to the last year fueled the 4.5% growth in the consumer price index. China is currently facing an African swine fever epidemic that has threatened the country’s pig population, leading to a sharp increase in pork prices.

The forex market wasn’t seen too aggressive following China’s economic reports on Tuesday. USD/CNY was reported to have dropped from 7.0412 to 7.0365. The pair is currently trading at 7.0375. According to the forex analysts, the events of the U.S – China trade talks continue to retain dominance in directing the movement in the forex market.