(Bloomberg) -- China’s consumer inflation rose for a third month in August while producer prices eased.
The consumer price index rose 2.3 percent from a year earlier, compared with a projected 2.1 percent increase in a Bloomberg survey of economists, which was also the reading in July. The producer price index climbed 4.1 percent, compared with the 4 percent estimate and a 4.6 percent gain the previous month.
Spreading swine fever, floods in a key vegetable-producing region and soaring rent in big cities all have economists concerned about rising inflation risks amid the slowing economy, although the consumer price index still remains well below the government ceiling of 3 percent. The situation is undesirable for corporate China, as their profits can be eroded by a slowdown in factory-gate prices while their costs would rise with the consumer gauge.
Read More: Swine Fever, Flooding Raise Concerns Over Higher China Inflation
The CPI may rise further into September, while PPI growth will continue to moderate to near zero at the end of the year, Jiang Chao, fixed-income analyst at Haitong Securities Co., wrote in a recent note. "The central bank doesn’t need to increase rates due to concerns on currency depreciation or inflation pressure, and the monetary conditions will remain eased."
To contact Bloomberg News staff for this story: Xiaoqing Pi in Beijing at xpi1@bloomberg.net
To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger
©2018 Bloomberg L.P.