Sneak preview on China’s first quarter GDP and March inflation from Reuters today, April 14.
China’s economy grew about 11.9% in the first quarter from a year earlier, unofficial numbers available in Beijing say according to Reuters. That would be above even the whopping 11.7% growth expected by economists surveyed by Bloomberg. China is scheduled to report its official growth and inflation numbers for March and the first quarter on Thursday.
Reuters also reports that March consumer price inflation will come in at 2.4%. That would be down from the 2.7% figure reported for February.
It’s not clear to me how the market will take that inflation report.
Yes, the number will be down from February but when the February number was released economists stressed that the February inflation reading was inflated by the late date of this year’s New Year’s holiday. Expectations were that the inflation number would come down in March. So I don’t know if a 2.4% read would be considered a pleasant surprise or a disappointment.
Either way another bit of news from China this morning says that inflation is headed higher this year.
On April 14 the National Development and Reform Commission announced an immediate increase of 4.05% in the retail price of fuel and 4.47% in the retail price of diesel.
Of course, some economists in the United States would say that kind of inflation doesn’t matter since it comes in the volatile fuel price category that, along with food prices, is excluded from core inflation measures.
But this is still a real increase of about 3 cents a liter in fuel and diesel prices that will come out of the pockets of the average family in China, that will gradually force up the prices of anything that travels by truck, and that will increase worry in the Beijing government that inflation is in danger of getting out of control.
Seems like real inflation to me.