BEIJING, Wednesday, July 10, 2024– China’s consumer price inflation came in lower than expected in June, rising only 0.2% year-on-year, according to data released Wednesday by the National Bureau of Statistics. This figure falls short of the 0.4% increase predicted by a Reuters poll.
The report of China’s National Bureau of Statistics can been seen here (English Version)
CNBC report can be read here.
Meanwhile, producer prices, which reflect factory-gate inflation, fell by 0.8% compared to June 2023, in line with forecasts. Core CPI, excluding volatile food and energy prices, also saw a slight deceleration, rising 0.6% year-on-year compared to the first half’s 0.7% increase.
Analysts point to China’s weak domestic demand as a key factor behind the subdued inflation figures.
“The risk of deflation has not faded,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. He noted that pork prices, while surging 18.1% year-on-year, were offset by a 13.4% decline in beef prices. Tourism spending also saw a modest increase compared to last year but trailed May’s figures.
Zhang expects China to rely on exports to bolster growth in the first half of 2024. The country is scheduled to release its June trade data on Friday, July 12.
China’s low inflation stands in stark contrast to major economies like the United States, where prices remain elevated. This discrepancy highlights the challenges China faces in stimulating domestic consumption.
