BEIJING: China’s factory gate prices experienced a significant decline in June, the sharpest fall in over seven-and-a-half years, failing to meet expectations. Consumer prices, on the other hand, remained unchanged. This slump can be attributed to the struggling post-COVID recovery, which has resulted in a decrease in demand.
According to the National Bureau of Statistics (NBS), the producer price index (PPI) has now dipped for nine consecutive months, with a year-on-year decline of 5.4%. This marks the biggest drop since December 2015, surpassing the 4.6% decrease seen the previous month. Analysts had predicted a 5.0% fall.
Meanwhile, the consumer price index (CPI) showed no change compared to the same period last year, in contrast to the 0.2% increase observed in May. This is the slowest pace seen since February 2021 and fell short of the 0.2% rise predicted in a Reuters poll of analysts.
As manufacturing and consumer spending face obstacles, China’s economic recovery has experienced a loss in momentum. In response, China recently implemented measures such as a cut in policy rates to enhance liquidity and promised further actions to stimulate household consumption.
The government has set a target for average consumer inflation in 2023 at around 3%. In 2022, prices rose by 2% year-on-year.
Additionally, the core CPI, which excludes the volatile prices of food and energy, rose by 0.4% compared to the previous year. This indicates a slowdown from the 0.6% increase seen in the previous month. – Reuters
Credit: The Star : Business Feed
