China consumer prices rise less than expected as deflation pressure lingers
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The consumer price index rose 0.2 per cent from a year earlier, the National Bureau of Statistics said on July 10.
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BEIJING - China’s consumer prices eked out another small gain in June, hovering near zero for a fifth month, a sign that deflationary pressures continue to impede an economic recovery.
The consumer price index rose 0.2 per cent from a year earlier, the National Bureau of Statistics said on July 10. That compares with an increase of 0.3 per cent in May and a median forecast of 0.4 per cent in a Bloomberg survey of economists.
Factory gate prices remained stuck in deflation, as they have been since late 2022, with the producer price index sliding 0.8 per cent from a year earlier.
Economists surveyed by Bloomberg had expected a 0.8 per cent drop after the index declined 1.4 per cent in May.
China’s economic recovery has been uneven in 2024, with manufacturing at times a bright spot while consumption has been hampered by a prolonged real estate slump and a weak job market.
Investors are looking to a key policy meeting of the ruling Communist Party next week for clues on Beijing’s long-term plans for addressing a broad range of issues. Second-quarter gross domestic product data comes on July 15.
The risks from deflation are serious for China, potentially leading to a downward spiral with people holding off on purchases due to expectations prices would continue falling. That would dent overall consumption and spill over to businesses.
Economists surveyed by Bloomberg forecast consumer prices to increase by 0.6 per cent in 2024, a far cry from the 3 per cent official target. BLOOMBERG
