China’s factory gate prices fall at fastest pace in 7 years

BEIJING  -China’s factory-gate prices fell at the fastest pace in over seven-and-a-half years in June, while consumer inflation was at its slowest since 2021, adding to the case for policymakers to use more stimulus to revive sluggish demand.

Momentum in China’s post-pandemic economic recovery has slowed from a brisk pickup seen in the first quarter amid faltering manufacturing and lackluster consumer confidence.

The producer price index (PPI) fell for a ninth consecutive month, down 5.4 percent from a year earlier after a 4.6- percent drop the previous month. That compared with a forecast for a 5- percent fall.

The consumer price index (CPI) was unchanged year-on-year, compared with the 0.2- percent gain seen in May, the National Bureau of Statistics (NBS) said, missing the median estimate for a 0.2- percent rise in a Reuters poll.

Momentum in China‘s economic recovery has slowed as manufacturing and consumer spending falters. Authorities are signaling faster growth in the second quarter and markets are awaiting more concrete stimulus from Beijing to prop up consumption.

READ:  China’s factory gate deflation deepens in May