Chinese disinflation persists as food inflation dropped

The CPI inflation eased further to 1.3% y/y from 1.6% in September and 2.0% in August less than market expectation of 1.5%. This decline was by food inflation cooled to 1.9% y/y from 2.9% in previous month and dropped 1% m/m. Food inflation plunged with soared production of pork.

Non-food inflation moderated to 0.9% y/y with monthly gain of 0.1%.

PPI stayed at -5.9% y/y following previous month's.

Indeed, Chinese disinflation, not deflation, persists. Upside potential for inflationary pressure seems so weak for now. But, disappointed price index September was almost led by food inflation, the temporary factor. This is why we should not consider Chinese economy as the deflation yet.