According to data released on Monday, due to weak demand, the risk of deflation in China intensified in June, consumer prices remained stable, while factory prices fell even deeper.
According to the National Bureau of Statistics, the consumer price index (CPI) was flat compared with the same period last year, lower than the 0.2% increase in May. This figure is lower than the 0.1% growth expected by Wind, a financial data provider in China, and the lowest level since February 2021.
At the same time, the producer price index (PPI) in June, which reflects the prices of products charged by factories to wholesalers, decreased by 5.4% year-on-year, down from 4.6% in May and the lowest level since December 2015.
This is lower than expected. According to Wind, PPI was expected to drop by 5% last month.
Larry Hu, chief China economist of Macquarie Group, said: “The data is weaker than expected, which further proves that domestic demand is weak.”
As the staple food in China, the price of pork decreased by 7.2% in June compared with the same period of last year, while the price of fruit increased by 6.4% and the price of vegetables increased by 10.8%. China’s core consumer inflation rate increased by 0.4% in June compared with the same period of last year, which was lower than the 0.6% increase in May.
“As the impact of China’s re-opening gradually fades, core inflation continues to decline,” said an economist at Kaitou Macroeconomics. We expect the inflation rate to rise gradually later this year, but there is limited room for growth, leaving room for further relaxation of policies. “
Post time: Jul-11-2023