China's Inflation In June Remains Flat As Economy Struggles
The consumer price index for June was down from the 0.2 per cent seen in May
Inflation in China, the world's second-largest economy, recorded flat last month, while producer prices sank more than expected in the latest sign of weakness, citing official data news agency AFP on Monday. According to the report, the consumer price index for June was down from the 0.2 per cent seen in May, according to the National Bureau of Statistics (NBS), and was worse than expected as domestic demand slowed.
China’s staple meat, pork’s cost saw a decline at 7.2 per cent annually, as well as falling oil prices that made transportation cheap, dragged down the cost of the essential goods basket, the NBS said. Producer prices, which measure the cost of goods at the factory gate, tumbled 5.4 per cent year-on-year (YoY), following a 4.6 per cent slide in May.
Economists polled by Bloomberg had expected prices to sink 5 per cent.
Poor global demand and a steep drop in raw material costs have also put downward pressure on factory prices, the NBS said. Economic growth has slowed sharply since April after Beijing lifted strict Covid rules at the end of last year, while the yuan sits at a seven-month low against the dollar as exports drop.
Authorities are coming under increasing pressure to step in with stimulus but other than a few small interest rate cuts and pledges of action there has been little of substance out of Beijing.
Ongoing trade tensions between the US and China have also dragged on the economy, with US Treasury Secretary Janet Yellen on Sunday wrapping up a visit to Beijing with no signs of a breakthrough. Yellen said her talks with Chinese officials were "productive" but admitted there were "significant disagreements".
China has set a growth target of "around 5 per cent" this year, one of its lowest in decades. Growth figures for the second quarter will be released on July 17.
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