Beijing, China – China’s consumer price inflation only increased by 0.2% in June, falling short of expectations, according to data released by the National Bureau of Statistics on Wednesday. In contrast, producer prices aligned with forecasts, recording a decrease in June.
Expectations were for China’s consumer price index to rise by 0.4% year-on-year in June, as indicated by a Reuters poll. However, the actual increase was at a lower rate, signaling potential challenges in the Chinese market.
The producer price index, measuring factory-gate prices, saw a 0.8% decrease from the previous year, in line with expert predictions. Meanwhile, the core consumer price index, which excludes volatile food and energy prices, only rose by 0.6% in June. This growth rate is slightly slower than the previous 0.7% increase during the first half of the year.
Pork prices experienced a significant surge of 18.1% year-on-year in June, while beef prices saw a notable decline of 13.4%. Additionally, tourism prices showed a 3.7% increase compared to the same period last year, although this was down by 0.8% from May.
Chief economist at Pinpoint Asset Management, Zhiwei Zhang, expressed concerns over the risk of deflation persisting in China due to weak domestic demand. He highlighted the country’s reliance on exports to drive growth in the first half of the year. Zhang also emphasized the forthcoming release of China’s trade data for June, pointing to the importance of external factors in shaping the country’s economic landscape.
The subdued domestic demand in China has contributed to low inflation rates, distinguishing it from major economies like the United States where prices have remained higher. Despite these challenges, China continues to navigate economic complexities, balancing internal and external factors to sustain growth.