China CPI Watch

From now on, I will report non-annualized percentage changes.

The latest update on the price indices of China: without seasonal adjustment, CPI rises in the December of 2009 by 0.71%; with seasonal adjustment, it is 0.78%; Without seasonal adjustment, PPI rises by 3.25%; and with seasonal adjustment, PPI rises by 1.57%. We may roughly multiply the figures by 12 to obtain annualized numbers.

The following two graphs are time series plots of CPI and PPI in China from 2001; CPI_sa (PPI_sa) is CPI (PPI) after seasonal adjustment. Click on the graph for a better view.

Note that, with seasonal adjustment, The rise in CPI in the December translates into an annualized figure of 9.35%! It is not surprising that the People’s Bank of China has to tighten monetary policy.

China CPI

China CPI

China PPI

China PPI

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