China’s August CPI year-on-year rose by +0.8%, while PPI year-on-year increased by +3.8%, both within expectations.
But there is one thing worth mentioning separately:
The NBS’s exact wording— the main driver of the rebound in inflation is rising energy prices.
Today Brent is at $99.
China is the world’s largest crude oil importer; higher energy costs directly push up PPI, which then filters through to manufacturing costs and then to the prices of export goods.
For three years, China has been fighting deflation. Now energy has lifted CPI from 0.5% to 0.8%—but this is not driven by consumption recovery; it’s driven by oil-price inputs.
The difference matters: inflation from consumption recovery can be sustained, whereas inflation from energy inputs will rise and fall with oil prices.
If the situation between Iran and Iran-related tensions causes Brent to break above $100, China’s September CPI could jump directly to 1.2% or higher. At that time, the room for monetary easing in China would narrow, creating new pressure on Asian markets.
Will China’s central bank still have a chance to cut interest rates this year?
$BTC
#中国8月cpi同比涨0.8%
But there is one thing worth mentioning separately:
The NBS’s exact wording— the main driver of the rebound in inflation is rising energy prices.
Today Brent is at $99.
China is the world’s largest crude oil importer; higher energy costs directly push up PPI, which then filters through to manufacturing costs and then to the prices of export goods.
For three years, China has been fighting deflation. Now energy has lifted CPI from 0.5% to 0.8%—but this is not driven by consumption recovery; it’s driven by oil-price inputs.
The difference matters: inflation from consumption recovery can be sustained, whereas inflation from energy inputs will rise and fall with oil prices.
If the situation between Iran and Iran-related tensions causes Brent to break above $100, China’s September CPI could jump directly to 1.2% or higher. At that time, the room for monetary easing in China would narrow, creating new pressure on Asian markets.
Will China’s central bank still have a chance to cut interest rates this year?
$BTC
#中国8月cpi同比涨0.8%
