The politically sensitive food inflation surged to 9.1 percent in July, its highest since January 2012, as pork prices jumped 27 percent after a 21.1 percent climb in June. In addition, prices rose faster for fresh fruits (39.1 percent vs 42.7 percent), fresh vegetables (5.2 percent vs 4.2 percent) and eggs (10.5 percent vs 6.2 percent), and edible oil (0.4 percent vs 0.1 percent).
Non-food price inflation inched lower to 1.3 percent in July from 1.4 in the previous month, as prices rose at softer pace for: rent, fuel & utilities (1.5 percent vs 1.6 percent); education, culture & recreation (2.3 percent vs 2.4 percent). Meanwhile, inflation was steady for both clothing (at 1.8 percent), and household goods & services (at 0.8 percent), while cost went up slightly faster for healthcare (2.6 percent vs 2.5 percent) and other goods and services (3.4 percent vs 2.7 percent). Transport and communication prices continued to fall (-2.1 percent vs -1.9 percent).
Annual core inflation, which strips out volatile food and energy prices, came in at 1.6 percent in July, unchanged from the previous month.
On a monthly basis, consumer prices rose 0.4 percent in July
, the most since February, following a 0.1 percent decline in June while markets had expected a 0.2 percent gain.
Meanwhile, China's producer price index declined 0.3 percent year-on-year in July, after being unchanged in June and compared to market expectations of a 0.1 percent drop. This was the first yearly fall in producer prices since August 2016. Cost of means of production fell for the second straight month (-0.7 percent vs -0.3 percent), due to raw materials (-2.9 percent vs -2.1 percent) and processing (-0.2 percent vs flat reading) while extraction prices rose at slower rate (3.2 percent vs 4.5 percent). Meantime, consumer goods inflation hit its lowest in four months (0.8 percent vs 0.9 percent), of which food production (2 percent vs 2.2 percent), clothing (1.3 percent vs 1.6 percent), daily use goods (0.8 percent vs 0.5 percent), and durable goods (-1.2 percent vs -0.9 percent). On a monthly basis, producer prices fell 0.2 percent in July, after a 0.3 percent drop in June.