published Apr 11th 2017, 8:49 pm, by Bloomberg News

(Bloomberg) —
China’s producer price gains slowed last month from a peak in February, decelerating for the first time since September 2015 and tempering the global inflation outlook.

Key Points

The producer price index rose 7.6 percent last month from a year earlier, compared with the median estimate of 7.5 percent in a Bloomberg survey and a 7.8 percent increase in February The consumer price index rose 0.9 percent in March, compared with a 0.8 percent gain in February
Big Picture

Slowing factory inflation may dent optimism about a recovery in global demand, and curb China’s contribution to worldwide reflation. The rebound in recent quarters had provided the government respite to rein in borrowing, tighten monetary policy, and cool a frenzy of speculation in the housing market.

Economist Takeaways

“It looks like there’s a lot of inflation momentum at the producer level, which is good because they’ll have higher profits and more money to invest,” Dariusz Kowalczyk, a senior economist and strategist at Credit Agricole SA in Hong Kong, said in a Bloomberg Television interview. “It seems like PPI has peaked, it will remain fairly high in the second quarter and begin to slide in the second half of the year when base effects are out of the way.”

The Details

Producer prices fell month-on-month for the third time this year The momentum of producer price hikes in key sectors has started easing, according to a statement released on NBS website
–With assistance from Yinan Zhao.To contact Bloomberg News staff for this story: Xiaoqing Pi in Beijing at xpi1@bloomberg.net ;Enda Curran in Hong Kong at ecurran8@bloomberg.net To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net Reinie Booysen, Jeff Kearns

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