Hello Chinese inflation shock

Friday, 9 December 2016

Don’t say I did not warn you. Chinese inflation is out for November and it is a problem. The CPI is in at 2.3% ahead of 2.2% expected and the PPI has blown away expectations (except mine) at 3.3%:

The cause is, of course, dirt:

Prices do not flow straight through to these products from seaborne markets so there are more rises to come and my outlook has the PPI at 6-7% before the end of Q1 2017.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.