China's producer price index increased by 0.1 percent from a year earlier in January 2019, far slower than a 0.9 percent rise in the previous month and slightly below market expectations of 0.2 percent. It was the lowest producer inflation since September 2016, amid a slight decline in prices of means of production (-0.1 percent vs 1 percent in December), such as raw materials (-1.6 percent vs 0.8 percent), while inflation slowed for processing (0.3 percent vs 0.8 percent) and extraction (1.2 percent vs 3.8 percent). At the same time, consumer goods inflation edged down to 0.6 percent from 0.7 percent, of which food production (0.8 percent vs 0.9 percent), clothing (1.6 percent, the same as in December) and daily use goods (0.3 percent vs 0.4 percent). The cost of consumer durable goods was flat, following a 0.2 percent rise in December. On a monthly basis, producer prices fell 0.6 percent in January, the third straight month of decrease. Producer Prices Change in China averaged 1.30 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.
Producer Prices Change in China is expected to be 1.80 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 2.00 in 12 months time. In the long-term, the China Producer Prices Change is projected to trend around 2.30 percent in 2020, according to our econometric models.