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China consumer inflation rises to nearly 6-year high; producer prices drop again

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China consumer inflation rises to nearly 6-year high; producer prices drop again

China's annual consumer inflation accelerated in September as pork prices soared, while producer prices continued to decline, data from the National Bureau of Statistics showed.

The consumer price index rose 3.0% year over year in September following a 2.8% increase in August. This was the fastest annual increase since October 2013, when consumer prices gained 3.2%, Reuters reported.

The consensus estimate of economists polled by Econoday was for the index to rise 2.9%. The increase was driven by food prices, which climbed 11.2% year over year as prices of pork surged 69.3% amid the African swine fever outbreak.

On a monthly basis, the consumer price index grew 0.9% in September, following a 0.7% increase in August.

Meanwhile, the producer price index declined 1.2% year over year in September, in line with Econoday estimates and following a 0.8% drop in August. This marked the fastest pace of decline since July 2016, Reuters said.

Month over month, producer prices ticked up 0.1%, reversing a 0.1% dip previously.

Consumer inflation is likely to accelerate further amid supply disruptions and as the drag from weaker oil prices eases, wrote Martin Lynge Rasmussen, China economist at Capital Economics.

"But rapid food price inflation is unlikely to be a barrier to monetary easing, and we continue to anticipate further loosening in the next few quarters as demand-side pressures remain muted and factory-gate deflation deepens," Rasmussen added.