China's May CPI up 1.5%, PPI up 5.5%

China's consumer price index, a main gauge of inflation, rose 1.5 percent year on year in May, the National Bureau of Statistics said Friday.

The CPI expansion in May is in line with estimates. It quickened from April's 1.2 percent, March's 0.9 percent and February's 0.8 percent.

On a monthly basis, however, the CPI declined 0.1 percent, according to the NBS.

Of the 1.5-percent CPI growth in May, 1 percentage point was contributed by the carryover effect of price increases last year, NBS senior statistician Sheng Guoqing said.

The NBS attributed the pick-up in CPI partly to higher non-food prices, which grew 2.3 percent year on year in May.

However, food prices dropped 1.6 percent. Meat and vegetable prices fell 7.8 percent and 6.3 percent year on year respectively.

Excluding volatile food and energy prices, the core CPI increased 2.1 percent year on year in May, which is the same as the previous month.

CPI increased 1.4 percent on average in the first five months of the year.

The figure is well below the official annual inflation control target of around 3 percent.

Lian Ping, chief economist at the Bank of Communications, said the CPI may continue to increase next month, as the carryover effect will reach the highest point in June.

In the second half of 2017, the CPI may go down, according to Lian, forecasting that there will not be obvious inflation pressure throughout the year.

The producer price index (PPI), which measures costs of goods at the factory gate, rose 5.5 percent year on year in May, down from 6.4 percent in April and missing expectations of 5.7 percent.