Link Securities | According to official data, China’s consumer price index (CPI) fell by 0.1% year-on-year in March, falling below the consensus expectation of a 0.1% increase and marking the second consecutive month of decline, as the trade war with the US threatens to put further downward pressure on prices.
However, the latest fall was significantly more moderate than the 0.7% in February, supported by a smaller fall in food prices, as pork prices accelerated and fresh vegetable prices rebounded. Meanwhile, non-food prices increased by 0.2%, reversing a slight fall of 0.1% in February, driven by increases in housing prices (0.1% versus 0.1%; February); health (0.1% versus 0.2%; February); and education (0.8% versus -0.5%; February), despite the fact that transport prices continued to fall (down 2.6% versus 2.5%; February).
