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PPI declines ease amid recovery signs
By Wang Yanlin |
September 21, 2009, Monday
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Online Edition
Online Edition
DECLINES in Shanghai's producer prices eased in August for the first time in nine straight months, a sign indicating that deflation pressure is reducing.
The Producer Price Index fell 8.1 percent from a year earlier last month, moderating from the drop of 8.3 percent in July, the Shanghai Statistics Bureau said today.
"It likely ends the downward direction of losses in producer prices," said Li Maoyu, an analyst at Changjiang Securities Co. "The demand for manufacturing seems it is stabilizing, while consumer prices showed a similar trend in August."
Shanghai's consumer prices slid 0.6 percent on an annual basis last month, recovering sharply from the fall of 1.9 percent in July. The strong moderation came after the city's economy showed signs of recovery, with bustling stock market transactions and vibrant property sales.
"People have confidence in Shanghai," said Chen Lu, an analyst at Haitong Securities Co. "The city has hardly experienced any deflation in the past months because people are still buying, just more cautiously."
Deflation is considered harmful to the economy because people tend to stop spending and wait for prices to fall.
The Producer Price Index fell 8.1 percent from a year earlier last month, moderating from the drop of 8.3 percent in July, the Shanghai Statistics Bureau said today.
"It likely ends the downward direction of losses in producer prices," said Li Maoyu, an analyst at Changjiang Securities Co. "The demand for manufacturing seems it is stabilizing, while consumer prices showed a similar trend in August."
Shanghai's consumer prices slid 0.6 percent on an annual basis last month, recovering sharply from the fall of 1.9 percent in July. The strong moderation came after the city's economy showed signs of recovery, with bustling stock market transactions and vibrant property sales.
"People have confidence in Shanghai," said Chen Lu, an analyst at Haitong Securities Co. "The city has hardly experienced any deflation in the past months because people are still buying, just more cautiously."
Deflation is considered harmful to the economy because people tend to stop spending and wait for prices to fall.
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