Headline inflation, as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100)1, increased to 14.0 per cent in December 2021 from 11.1 per cent in November 2021. Meanwhile, on an annual average basis, the NCPI increased to 7.0 per cent in December 2021 from 6.2 per cent in November 2021.

Inflation was driven by monthly increases of prices of items in both Food and Non-food categories. Subsequently, Food inflation (Y-o-Y) increased to 21.5 per cent in December 2021 from 16.9 per cent in November 2021, while Non-Food inflation (Y-o-Y) also increased to 7.6 per cent in December 2021 from 6.2 per cent in November 2021.

Manufacturing PMI indicates that manufacturing activities sustained the expansion on a month-on-month basis in December 2021, recording an index value of 58.1 mainly due to the expansion in New Orders and Production. All the sub-indices except Employment increased during the month.

The expansion in New Orders and Production was mainly driven by seasonal demand for the food & beverage manufacturing sector. New Orders and Production in manufacture of textile and wearing apparel sector also showed an improvement, yet at a slower pace. However, Employment sub-index declined in December compared to November 2021. The Stock of Purchases increased at a slower pace compared to the increases in New Orders and Production. Many respondents mentioned that although they wanted to build up stocks significantly ahead of the Chinese new year holidays, they were able to do it only to a certain extent due to import related issues.