China’s consumer inflation rate grew at its fastest pace in six months in October as food prices rose, while producer prices accelerated to a near-five year high, exceeding expectations.
The consumer price index (CPI) rose 2.1% in October from a year earlier, compared with a 1.9% increase in September, the National Bureau of Statistics (NBS) said on Wednesday.
Analysts had expected a 2.1% gain, a Reuters poll showed.
Factory prices rose 1.2% on-year, the fastest pace since December 2011 after turning marginally positive in September for the first time in nearly five years. The reading handily beat forecasts for a 0.8% rise.
Stronger factory prices have helped boost industrial profits, relieving some pressure on companies squeezed by higher costs and weak demand.
China’s economy expanded at a steady 6.7% in the third quarter and looks set to hit Beijing’s full-year target, fueled by stronger government spending, record bank lending and a red-hot property market that are adding to its growing pile of debt.
A jump in food prices fueled faster consumer inflation in October. Food prices rose 3.7%, compared with a 3.2% gain in the previous month.
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Non-food prices inched up 1.7% versus September’s 1.6% gain.
On a monthly basis, consumer prices fell 0.1%. Prices for health care rose 4.8%, the fastest-rising CPI sub-category.
China’s producer price index is expected to continue to increase year-on-year in the coming months, statistics bureau spokesman Sheng Laiyun said in late October.
“I believe PPI in the coming months will continue to show positive growth year-on-year, but it could be volatile month-on-month,” Sheng told a group of foreign reporters.