Rising food prices in China edged inflation rate to 1.6% in December

China's Consumer Price Index (CPI) edged up to 1.6% in December YoY, from November's 1.5%, according to data released by the National Bureau of Statistics on Saturday. December's inflation was driven by a 1.5% increase in food prices: 2.3% for fresh fruit and 13.7% for fresh vegetables. The data showed the CPI rose 1.4% for the year, pushed up by higher food prices (pork and fresh vegetables jumped 9.5% and 7.4% YoY respectively). The year's rise was well below the official target of 3%, and lower than 2014's CPI growth of 2%. The Producer Price Index (PPI) fell 5.9% in December from a year earlier, marking a record 46 months of consecutive declines, reflecting continued hardship in the manufacturing sector as China deals with overcapacity. The latest set of data adds to concerns among many economists over growing deflation risks in the world's second largest economy. 

With the exception of rising food prices, there were few other signs of momentum last month to hope for a major economic turnaround in 2016. Photo: Reuters