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China CPI and PPI cool in July, keeping deflation risk in focus
China said CPI rose 0.5% year on year in July, while PPI increased 3.5% year on year, easing faster than economists expected.
China’s July inflation data showed softer price pressure, with the consumer price index cooling to a six month low and the producer price index easing more than expected, according to official figures cited by Forexlive.
The National Bureau of Statistics said CPI rose 0.5% year on year in July, edged down 0.1% month on month, and core CPI rose 0.9% year on year. Food prices fell 1.5%, while cheaper oil and weak demand were cited as factors behind the cooling.
On the wholesale side, China’s PPI rose 3.5% year on year in July, easing from 4.1% in June and coming in below economists’ expectations in a Reuters poll. The data pointed to gains concentrated in mining and raw materials, with declines in food and daily consumer goods.
Forexlive said the mixed backdrop supports a picture of a two speed economy, with stronger exports and factory output offset by weak household demand linked to a property slump and job security concerns, and it left room for an inflation path that stays subdued until Beijing’s fiscal support feeds through later in the year.