Producer prices in China experienced the fastest decline in the last 7.5 years.
According to China’s National Bureau of Statistics, producer prices fell 5.4 percent year-on-year in June and 0.8 percent from a month ago. That was weaker than polls expecting a 5.0 percent year-on-year decline, compared with May’s 4.6 percent year-on-year decline.
Annual consumer price inflation remained flat in June, falling short of the 0.2 percent increase in survey expectations. This was the lowest inflation rate since February 2021. In May, consumer prices increased by 0.2 percent compared to the same period of the previous year. In June, prices were expected to increase by 0.2 percent.
While China’s annual producer deflation deepened in June, consumer prices remained flat. Thus, official data fell short of market expectations on Monday. The data underlined the depth of challenges surrounding the world’s second-largest economy in stimulating demand and stimulating growth.
Monday’s data provides new evidence that growth is slowing, suggesting that easing monetary policy is insufficient to revive and sustain the country’s recovery from strict “zero Covid” restrictions imposed late last year.