China: Coronavirus Accelerating Inflation

Last month, inflation in China hit its highest level in more than eight years. While many businesses in China are closed due to coronavirus, increasing government spending to fight the outbreak may accelerate inflation still further due to supply shortages.

• China’s consumer price index rose 5.4 percent on a year-over-year basis in January, after a 4.5 percent increase in December, according to the National Bureau of Statistics of China (NBS).
• The NBS attributed January's inflation figures to the Lunar New Year holiday, the coronavirus outbreak, and a lower price base from last year.
• January’s jump was mainly fueled by the rising price of meats (especially pork) due to the Asian swine fever that has decimated hog populations in China. Meat prices almost doubled in January compared to the same month of 2019.