The year-on-year inflation rate in China dropped to its least point in a year and a half during the month of March, according to official data.
Post Zero-Covid Policy Inflation in China Slows Down
The Trading Economics website reported that the annual inflation rate in China unexpectedly decelerated in March, reaching its lowest level since September 2021.
The 0.7% figure reflects an easing of the cost of food and non-food items which follows on the heels of an uneven economic recovery post the removal of the government’s zero-Covid policy, according to the statistical portal.
The cost of food decreased to 2.4% from 2.6% in February, a 10-month low that is mostly due to the decline in the cost of fresh vegetables that was steeper than the rise of pork meat prices.
On the other hand, non-food prices continued to decline as well, from 0.6% to 0.3%, a trend linked to further reductions in the cost of transportation (-1.9% compared to 0.1%) and housing (-0.3% versus -0.1%).
In contrast, education costs rose more than the prior month, at 1.4% in March from 1.2% in February, and inflation remained unchanged for health-related expenses, at 1.0%.
Meanwhile, core consumer prices, excluding the volatile prices of food and energy, increased 0.7% year-on-year, after a 0.6% gain in the previous month, the state statistics office reported. They decreased 0.3% on a monthly basis despite expectations they would remain the same.
Hong Kong stocks experienced a boost following the government report about the slowing price rises. Experts have been citing China’s lower inflation in comparison with Western economies due to Beijing’s tighter monetary policies during the pandemic, access to cheaper energy from allies like Russia and Iran, and the country producing many of the commodities that it needs.
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