China's producer price index declined by 0.5 percent year-on-year in December, following a 1.4 percent drop in the previous month and compared with market consensus of a 0.4 percent fall. Cost of means of production decreased less (-1.2 percent vs -2.5 percent in November), mainly due to raw materials (-2.6 percent vs -5 percent), processing (-0.9 percent vs -1.6 percent) and a rebound in extraction prices (2.6 percent vs -1.4 percent). Meanwhile, prices continued to rise for consumer goods (1.3 percent vs 1.6 percent), of which food production (5 percent vs 5.4 percent) and daily use goods (0.1 percent vs 0.1 percent). On the other hand, cost of clothing edged down (-0.1 percent vs 0.3 percent) and prices fell faster for durable goods (-2.4 percent vs -2.1 percent). On a monthly basis, producer prices were flat. For the whole 2019, factory prices fell 0.3 percent, following a 3.5 percent gain in 2018. Producer Prices Change in China averaged 1.24 percent from 1995 until 2019, reaching an all time high of 13.47 percent in July of 1995 and a record low of -8.20 percent in July of 2009. source: National Bureau of Statistics of China
Producer Prices Change in China is expected to be 1.40 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Producer Prices Change in China to stand at 1.90 in 12 months time. In the long-term, the China Producer Prices Change is projected to trend around 1.30 percent in 2020, according to our econometric models.