China Inflation Softens; Producer Price Inflation Accelerates
(RTTNews) - China's consumer price inflation softened in June, while producer price inflation accelerated to the highest in nearly four years on elevated energy prices, official data showed Thursday.
Consumer price inflation eased to 1.0 percent in June from 1.2 percent in May, the National Bureau of Statistics said. Prices were expected to rise 1.1 percent.
The decline was driven by the fall in food prices. Food prices dropped 1.6 percent largely due to the sharp decrease in pork prices. At the same time, non-food prices rose at a slower pace of 1.5 percent.
Core inflation that excludes food and energy prices, slowed to 1.0 percent in June from 1.1 percent in May, data showed.
On a monthly basis, consumer prices slid 0.3 percent, compared to the expected fall of 0.2 percent.
Data showed that producer prices were up 4.1 percent year-on-year in June, in line with forecasts, and up from 3.9 percent a month earlier. The rate of growth hit the strongest since July 2022. Producer prices dropped 0.3 percent from May.
Price data shows that China is moving from near-deflation to low positive inflation, ING economist Lynn Song said.
The economist noted that this sort of inflation level is not likely to impede the People's Bank of China from monetary policy action, should it deem it necessary.
The economist said he looks for one 10 basis point rate cut in the second half of the year, with odds increasingly shifting in favor of a move in the third quarter instead of fourth quarter.
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