China’s Producer Prices Fall At Slower Pace; Consumer Price Inflation Rises

’s producer prices declined for the fifth straight month in June, but the pace of deflation eased as the economy showed signs of recovery from the coronavirus driven downturn.

Producer prices dropped 3 percent on a yearly basis, slower than the 3.7 percent fall seen in May, the National Bureau of Statistics said on Thursday.

Although this was the fifth consecutive decrease in prices, the pace of fall slowed in June. Economists had forecast an annual drop of 3.2 percent.

Month-on-month, producer prices were up 0.4 percent, offsetting a 0.4 percent drop in the previous month.

At the same time, consumer price inflation rose slightly to 2.5 percent, as expected, from 2.4 percent in May, another report from the NBS revealed Thursday.

On a monthly basis, consumer prices fell 0.1 percent, but slower than the 0.8 percent decline logged in May.

Core inflation, which excludes food and energy prices, slowed to 0.9 percent from 1.1 percent in the prior month.

Food prices advanced 11.1 percent, faster than May’s 10.6 percent rise. Pork prices continued to rise at a slower pace. Pork prices rose 81.6 percent in June.

Meanwhile, non-food price inflation eased slowly to 0.3 percent from 0.4 percent.

The increase in producer prices added to evidence that industrial demand had mostly recovered by the end of the second quarter, Julian Evans-Pritchard, an economist at Capital Economics, said. Core inflation fell to its weakest in a decade but will probably bottom out before long, he added.

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