China’s inflation likely at 1.6% next year

China's CPI inflation for November increased to 1.5% year on year in compare to 1.3% in October. Food prices including vegetable and fruits are the key factor to drive the inflation rate up. The food inflation increased to 2.3 year on year against 1.9% in previous month. Likewise, non-food items are also increasing despite lower energy prices.

The PPI price index remains in the negative territory for November and stood at -5.9% year on year for fourth month.

"In light of incoming data and our views of continued headwinds to the outlook, we revise down our annual inflation forecasts for 2015 and 2016 to 1.4% (from 1.6%) and 1.6% (2.0%), respectively", says Barclays in a research note.