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China’s consumer prices rise for third month, factory deflation persists

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BEIJING: China’s consumer prices rose in April for a third straight month, while producer prices extended declines, suggesting resilient domestic demand, despite a shaky economic recovery.

The closely watched numbers follow official surveys showing cooling factory and services activity, as concerns rise about economic growth losing momentum, weighed down by a protracted housing downturn, boosting the case for more policy support.

The consumer price index (CPI) edged up 0.3 per cent in April from a year earlier, accelerating from a rise of 0.1 per cent in March, data from the National Bureau of Statistics (NBS) showed on Saturday (May 11). That was above a rise of 0.2 per cent forecast in a Reuters poll.

CPI rose 0.1 per cent from the previous month, reversing a drop of 1 per cent in March and above a decline of 0.1 per cent predicted by economists.

The producer price index (PPI) dropped 2.5 per cent in April from a year earlier, easing from a slide of 2.8 per cent the previous month and compared with a forecast decline of 2.3 per cent.

Domestic housing demand remains soft, with average daily home sales having slumped 47 per cent over the Labour Day holiday from 2023 levels, while jobless fears linger, notably among young people.

Core inflation, excluding volatile food and fuel prices, grew 0.7 per cent in April, up from 0.6 per cent in March.

China will use policy tools, such as banks’ reserve requirement ratio (RRR) and interest rates, in a flexible way to step up support for the economy, the Politburo, a top decision-making body of the ruling Communist Party, said in late April.

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