Published: Thu, April 12, 2018
Economy | By

Inflation shows strongest annual gain since early 2017

Inflation shows strongest annual gain since early 2017

Albania posted annual inflation of 2% in March, after consumer prices rose by 2.1% y/y a month earlier, statistics office data showed on April 10. It was the lowest year over year increase since February 2017 when annual inflation reached 4.86%, and 0.3% lower than last month's rate.

China's factory-gate inflation cooled to a 17-month low in March, probably indicating an ebbing in demand and backing expectations of a broader slackening in economic growth this year as authorities extend a clamp-down on financial risks.

The U.S. central bank increased borrowing costs last month and forecast at least two additional rate hikes in 2018.

A key measure of US inflation accelerated to the highest in a year as a drag from mobile-phone costs faded, bearing out the Federal Reserve's forecast for a pickup in price gains.

Producer price inflation (PPI), also known as factory gate inflation, also moderated, dropping by 0.2% from February.

The IMF said in a report earlier that it expected inflation to fall to 12 percent by June and to single digits by 2019.

The advance in the core CPI brought the three-month annualized gain to 2.9 percent, after 3.1 percent in February.

The fuel price slump was likely to be dismissed as noise, since economists have predicted the volatility in the spring months after seeing similar moves a year ago. The core consumer price index, which strips out volatile food and energy prices, rose 2.0 per cent in March, slowing from 2.5 per cent in February. That measure-the price index for personal consumption expenditures-shows inflation continues to run below the Fed's target but is not far off.

Ian Shepherdson of Pantheon Macroeconomics said the new signs of an upward trend meant the Fed was likely to raise rates a total four times this year rather than the three hikes now forecast. Stocks on Wall Street fell as investors anxious about rising tensions between the United States and Russian Federation over a possible US military action against Syria.

The core CPI's pickup will help reinforce the view of policy makers that inflation had been weighed down by transient factors such as the unusual weakness in the cost of wireless-phone services. That was the biggest annual increase since February 2017. Food prices edged up 0.1 percent after being unchanged in February.

Alcoholic beverages and tobacco prices went up by 1.9% y/y.

That's not to say everything was cheaper last month.

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