Inflation in China is still red hot, but it may have finally started its cooling process.
China’s inflation rate fell slightly to 5.3% in April — a slight slip from 5.4% growth in March, China’s National Bureau of Statistics reported Wednesday.
It could mark the start of a gradual slowdown in China’s inflation, as the government there continues its crackdown on inflation.
“April’s data release suggests that inflationary pressures have started receding to an extent,” Hongbin Qu, HSBC’s chief China economist, said in a research note.
Economists were expecting a pullback in the pace of inflation, based primarily on a slower increase in food prices, which make up roughly a third of the index.
Since October, food prices in China have been rising at double-digit rates, squeezing the purchasing power of Chinese consumers.
In April, food prices rose 11.5% from a year ago. While that was still a staggering pace, it marked a slight slowdown from March, when food prices were up 11.7% year-over-year.
Food prices may have started tapering off. From March to April, vegetables alone — which make up about a tenth of of the food Chinese households consume — saw their prices fall 11.2%.