China: Inflation accelerates in April from the prior month
Latest reading: Consumer prices increased 1.2% on a year-on-year basis in April, following a 1.0% rise in the prior month and above market expectations. Higher energy and chip price pressures were key upward drivers, while housing and food prices declined.
Lastly, consumer prices were up 0.30% in April in month-on-month terms, following a 0.70% decline in the prior month.
Panelist insight: Digging deeper into the data, Nomura analysts said:
“The pass-through from the surge in global energy and AI-related prices to headline inflation appears to have occurred faster than we expected, and we see some upside risks to our current 2026 inflation forecast of 0.6% for CPI and 1.0% for PPI. Although Beijing might breathe a sigh of relief that deflation has finally ended, it may not take much comfort, as China is a net importer of chips and the world’s biggest net importer of energy. The worsening terms of trade could shrink its balance of payments at a macro level and squeeze most domestic producers and consumers.”