JPMorgan Econ FI-China March CPI and PPI remained soft amid ongoing deflation...-107517126

JPMORGANAsiaPacificEconomicResearch11April2024ChinaEmergingMarketsAsia,EconomicandPolicyResearchMarchCPIandPPIremainedsoftamidongoingdeflationconcernsGraceNg•China’sMarchCPIeasedinlinewithourexpectations,withtheheadlineCPI(852)2800-7002grace.h.ng@jpmorgan.cominflationrateeasingto0.1%oya(ordown0.1%m/msa).ThenotablevolatilityinCPIprintsduringthefirstthreemonthsseemstoreflectLunarNewYearHaibinZhuseasonality.Takingthefirstthreemonthstogether,headlineCPIremainedsoft,averaging0.0%oya(or0.0%3m/3msaar).(852)2800-7039haibin.zhu@jpmorgan.com•FoodpriceseasedinMarchastheLNY-relatedboostreversedcourse,downTingtingGe0.3%m/msa(ordown2.7%oya),withdeclinesinporkprices(down6.7%m/mnsa)andvegetableprices(down11.0%m/mnsa).Vehiclefuelpricesrose1.1%(852)2800-0143m/mnsainMarch.tingting.ge@jpmorgan.com•CoreCPIinflationalsosoftened,rising0.6%oyainMarch(vs.1.2%oyainJiYanFebruary),ordown0.6%m/msa.(852)2800-7673ji.yan@jpmorgan.com•LNY-relatedseasonalvolatility(regardingpricesoffood,travelandtransportJPMorganChaseBank,N.A.,HongKongBranchcosts)togetheraccountedforabout92%ofthemonth-on-monthdeclineinMarchCPI.Asidefromthesefactors,generalpricingpowerseemstohaveremainedsoft,anddomesticdemandhasyettopickupmomentumonasustainedbasisbeyondtheholidayeffect.•PPIdeflationhasintensified,asheadlinePPIfell2.8%oyainMarch(vs.-2.7%oyainFebruary),and...