China’s consumer price inflation only rose by 0.2% in June from a year ago, falling short of expectations, while producer prices remained steady, according to data from the National Bureau of Statistics. The consumer price index was anticipated to increase by 0.4% year-on-year in June, as per a Reuters poll. On the other hand, the producer price index, measuring factory-gate prices, dropped by 0.8% from the previous year, aligning with forecasts.
As core CPI, which excludes more volatile food and energy prices, experienced a marginal 0.6% uptick year-on-year in June, slightly slower than the 0.7% rise for the first half of the year. Notably, pork prices soared by 18.1% in June from a year ago, while beef prices took a dip of 13.4%. Additionally, tourism prices climbed by 3.7% in June compared to the previous year, although this marked a slight decrease from May. Chief economist at Pinpoint Asset Management, Zhiwei Zhang, commented on the situation, highlighting that the risk of deflation in China still looms due to weak domestic demand and the nation’s reliance on exports for growth.
Given the context of lackluster domestic demand in China keeping inflation levels low, it poses a contrast to major economies like the U.S., where prices have persisted at elevated levels. With China anticipated to lean on exports to bolster growth in the initial half of the year, upcoming trade data for June is eagerly awaited and could shed more light on the economic landscape of the nation moving forward.
