‘A long-term phenomenon’: 4 takeaways from China’s March inflation data (2024)

FAQs

What is the long term inflation rate in China? ›

China Inflation Rate is at 0.50%, compared to 0.20% last month and -0.30% last year. This is lower than the long term average of 1.67%.

Inflation Rate in China averaged 4.66 percent from 1986 until 2024, reaching an all time high of 28.40 percent in February of 1989 and a record low of -2.20 percent in April of 1999. This page provides - China Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

This article analyzes the three possible causes of China's inflation: the existence of monopoly enterprises, demand exceeding supply, and structural changes. It is suggested that inflation be controlled with flexible fiscal policies rather than rely on IT of monetary police.

China's inflation rate expected to rise from 0.5% to 0.7%, potentially boosting the AUD/USD pair. Falling Chinese producer prices could soften consumer prices, weakening AUD/USD despite headline inflation. US inflation expectations hold at 3.0%, influencing Fed rate cut bets and driving AUD/USD volatility.

Inflation Erodes Purchasing Power

An overall rise in prices over time reduces the purchasing power of consumers because a fixed amount of money will afford progressively less consumption. Consumers lose purchasing power regardless of whether the inflation rate is 2% or 4%. They simply lose it faster at a higher rate.

The PBOC can print yuan as needed, although this can lead to high inflation. However, China has tight state-dominated controls on its economy, which enables it to control inflation differently compared to other countries. In China, changes are made to subsidies and other price control measures to check inflation.

HONG KONG -- China should increase the intensity of its macroeconomic policies and stick to an inflation goal of 2% to 3%, an adviser to the central bank has argued, echoing calls by experts for more stimulus to prop up demand.

By contrast, in Thailand and China, consumer prices have fallen. Inflation excluding food and energy is low, which, in China, reflects legacy issues from the pandemic and the property sector correction. Elsewhere, inflation is close to target. This means that countries need differentiated policies.

Overall, the paper confirmed the hypothesis that inflation in China is largely driven by excess money supply, and is correlated with changes in food price level. However, the findings are subject to various limitations of the paper, such as data quality, econometric technics, and model sophistication.

What is the core inflation in China? ›

The consumer price index excluding volatile food and energy costs rose just 0.3% in August from a year earlier, the least since March 2021, the National Bureau of Statistics said Monday. The broader CPI increased 0.6%, missing expectations even though it was buoyed by higher food costs due to bad weather last month.

Which countries have the highest interest rates? The countries with the highest interest rates are similar to those with the highest inflation rates. The current highest inflation rates by country are Venezuela (59.25%), Zimbabwe (20%), Argentina (40%) and Ghana (29%).

China Loan Prime Rate is at 3.35%, compared to 3.35% last month and 3.45% last year. This is lower than the long term average of 3.74%. The China Loan Prime Rate (LPR) is the lending rate provided by commercial banks to their highest quality customers, and serves as the benchmark for rates provided for other loans.

In August 2024, the monthly inflation rate in China ranged at 0.6 percent compared to the same month in the previous year. Inflation peaked at 2.8 percent in September 2022, but has eased recently. The annual average inflation rate in China ranged at 0.2 percent in 2023.

Inflation Rate in the United States averaged 3.30 percent from 1914 until 2024, reaching an all time high of 23.70 percent in June of 1920 and a record low of -15.80 percent in June of 1921.