China: Some signs of cooling in inflation

Data from China show a cooling in inflation in December, as compared to a broad retreat in price pressures and a higher base. Overall CPI increased by 1.5% year-on-year compared to the 2.3% increase in November. CPI decreased by 0.3% compared to the previous month. On the PPI, factory prices continued to cool in December as the government's efforts to increase energy supplies and stabilize prices left their mark. There is an increase of 10.3% in the producer price index compared to the previous year, from the 12.9% increase in November. Input and output prices sub-indices in the official December PMI data fell to their lowest levels since April 2020. Caixin China General manufacturing PMI data showed that input cost inflation fell to a 19-month low.