In June, China witnessed the sharpest decline in factory-gate prices in over seven-and-a-half years, while consumer inflation remained at its slowest pace since 2021.

These economic indicators further strengthen the argument for policymakers to implement additional stimulus measures in order to revive sluggish demand.

The country’s post-pandemic economic recovery has experienced a slowdown after the robust growth observed in the first quarter, primarily due to weakening manufacturing activity and subdued consumer confidence, CNN has reported.

China’s producer price index (PPI) registered its ninth consecutive monthly decline, dropping by 5.4% compared to the previous year.

This marked the most substantial decrease since December 2015, surpassing the 4.6% fall recorded in the previous month and the 5.0% decline forecasted in a Reuters analysts’ poll.

On the other hand, the consumer price index (CPI) remained unchanged on a year-on-year basis, in contrast to the 0.2% increase witnessed in May.

The National Bureau of Statistics (NBS) attributed this stability to a more pronounced decline in pork prices.

This CPI reading represents the slowest growth since February 2021 and fell short of the expected 0.2% rise projected in the Reuters poll.

The financial markets reacted to the lower-than-anticipated inflation figures, resulting in the offshore yuan relinquishing its earlier gains.

Written by staff