The rate of increase in consumer prices in December has continued to slow, pretty much across all measures (log annual and monthly changes; 2000=100):
Headline inflation is at 1.2% in log terms, and just a hair above the rate of core inflation (ex-food, ex-transport). Even the items on the Pain index are converging on the headline rate, though food remains the main contributor to positive inflation (log annual and monthly changes; 2000=100):
If you want to look into it in greater detail, the prime mover of food inflation has been in meats and in fish and other seafoods – both categories have seen price increases stabilise in the last half of 2012.
If I were a betting man (which I’m not), I’d wager on a slight acceleration in the run-up to CNY. Beyond that, I’m not sure, as prices, especially of food, will be dictated to by the weather and by the strength of the global economy. Nevertheless, it appears that there should be little concern over inflation, at least for the first half of this year.
December 2012 Consumer Prices report from the Department of Statistics