China reports stable CPI, PPI rises 0.4% from May
Print Edition
CHINA’S consumer inflation remained generally stable in June under the country’s continued efforts toward economic recovery, while factory-gate prices picked up from May as demand warms, official data showed yesterday.
The consumer price index, the main gauge of inflation, grew 2.5 percent year on year last month, expanding from the 2.4 percent gain in May, according to data from the National Bureau of Statistics.
On a monthly basis, consumer prices went down 0.1 percent. Food prices, which account for nearly one-third of weighting in China’s CPI, went up 0.2 percent last month.
In breakdown, pork prices rebounded to climb 3.6 percent from May as supply contracted over factors including declining hog production and pork import, as well as increasing demand from catering industry. Prices of vegetables rose 2.8 percent from May over flood in many regions across China and temporary closure of the Xinfadi farm produce wholesale market in Beijing for COVID-19 control.
Compared with the same period last year, food prices remained a major driver of consumer inflation in June, as its growth rate strengthened from May to 11.1 percent. In particular, pork prices rose 81.6 percent on year in June, a similar pace to the month before.
Excluding food and energy, the core CPI rose 0.9 percent over last year, down from 1.1 percent in May, according to Dong Lijuan, a senior statistician with the NBS.
The 0.9 percent core CPI growth is a record low, said Wen Bin, chief analyst at China Minsheng Bank, in a co-authored research note.
Food supply and demand is basically balanced amid the recovery of economic activities and government measures to keep prices stable, and consumer prices will be generally steady despite some fluctuations, said Wen.
In the first half of this year, the CPI went up 3.8 percent year on year on average.
Yesterday’s data also showed China’s producer price index, which measures costs for goods at the factory gate, went down 3 percent year on year in June, narrowing from the 3.7-percent decrease in May.
On a month-on-month basis, the PPI rose 0.4 percent last month, compared with a 0.4 percent fall in May. June was also the first time that producer prices rose since the COVID-19 outbreak struck in January, noted Martin Rasmussen, China economist for Capital Economics. He said this adds to evidence that industrial demand mostly recovered by the end of the second quarter.
Market demand continued to improve in June, as prices of international bulk commodities rebounded and the domestic manufacturing sector recovered steadily, said Dong.
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