Chinese New Year intensifies inflation in PRC economy
There is not enough data to forecast the Wuhan virus effect on GDP
Inflation in China has risen sharply in January due to the higher prices of food during the Chinese New Year and the outbreak of African swine fever, making pork considerably more expensive. We now have to wait and see what the effect of the new corona virus and the disruption of public life in China will be on consumer prices due to the outbreak of that disease.
Inflation rose to 5.4 percent on an annual basis, from 4.5 percent in December. That is the highest level in more than eight years. The prices of pork showed the strongest rise ever. Economists think that Chinese inflation may be volatile in the coming period, because food prices may rise due to the virus. The Wuhan virus can also ensure that households are in control, which in turn would have a depressing effect on inflation.
Chinese producer prices rose by 0.1 percent on an annual basis last month, after falling by 0.5 percent in December.