In May, the politically sensitive food prices increased by 0.1 percent, way slower than a 0.7 percent rise in April and marking the softest gain in food prices since a decline in January. Prices declined sharply for fresh fruit (-2.7 percent from +4.2 percent in April) and fell further for pork (-16.7 percent from -16.1 percent) while rose more for eggs (20.8 percent from 14.9 percent).
Meantime, non-food inflation edged up to 2.2 percent from 2.1 percent in April. Upward pressure came from: transport and communication (1.8 percent from 1.1 percent); other goods and services (1 percent from 0.9 percent); clothing (1.1 percent, the same as in April); rent, fuel & utilities (2.2 percent, the same as in April); household goods and services (1.5 percent, the same as in April); healthcare (5.1 percent from 5.2 percent); and education, culture and recreation (1.9 percent from 2 percent).
For 2018, China set its consumer inflation target at around 3 percent, in line with the preceding year's figure.
On a monthly basis, consumer prices fell by 0.2 percent, similar to the April's figure while markets expected a 0.1 percent decline.
Meanwhile, the producer price index increased by 4.1 percent from a year earlier in May, after a 3.4 percent rise in the previous month and above market expectations of 3.9 percent. It is the highest producer inflation since January. Prices of means of production went up at a faster pace (5.4 percent from 4.5 percent), namely extraction (8.1 percent from 6.1 percent), raw materials (7.4 percent from 5.7 percent) and processing (4.4 percent from 3.9 percent). Also, cost of consumer goods rose more (0.3 percent from 0.1 percent), namely food production (0.3 percent from 0.1 percent), clothing (0.3 percent from 0.2 percent); daily use goods (1.1 percent from 0.9 percent); while prices of consumer durable goods declined further (-0.7 percent from -0.6 percent). On a monthly basis, producer prices went up by 0.4 percent.