China Inflation Rate

China's annual inflation rate rose to 1.8% in December 2022 from November's eight-month low of 1.6%, in line with market consensus. The latest result largely reflected a 4.8% rise in food prices, even as domestic demand was sluggish amid a spike in COVID infections. Meantime, non-food inflation was unchanged (at 1.1%), with prices continuing to rise for transport & communication (2.8% vs 2.9%), health (0.6% vs 0.5%), clothing (0.5% vs 0.5%), and education, culture (1.4% vs 1.3%); while the cost of housing fell further (-0.2% vs -0.2%). Core consumer prices, excluding the volatile prices of food and energy, rose 0.7% yoy in December, after a 0.6% gain in November. On a monthly basis, consumer prices unexpectedly were flat in December, compared with forecasts of a 0.1% fall and after a 0.2% drop in November. For the full year of 2022, inflation was 2%, below the government target of around 3%.