High prices for vegetables in the opening months of the year and then pork over the summer contributed to an uncomfortable bloated feeling for China’s policy makers.
Inflation peaked at 6.5% in July and stayed stubbornly high in the months that followed.
Relief may be on the way. Advance data on pork and other agricultural products shows price rises beginning to slow down in October.
The increase in pork prices measured by the Ministry of Commerce fell to 42% year-to-year in October from 50% in September.
The Ministry of Agriculture’s index of wholesale food prices rose 11.3% year-to-year, also down from 16% in September.
With food accounting for around a third of China’s consumer price index basket, and all the other elements relatively stable, the result should be a pronounced drop in the CPI when the data is published Wednesday.
The median forecast of 12 economists surveyed by Dow Jones is for inflation to drop to 5.4% year-to-year, down from 6.1% in September.
That’s still outside the government’s comfort zone. But falling inflation may give Beijing an appetite to support growth.
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