China's Factory Gate Prices Fall at Fastest Pace in 7 Years

July 10, 2023, 09.39 AM | Source: Reuters

ILUSTRASI. China: Women work at the production line manufacturing electronic keyboards at a factory of the Tianjin Yamaha Electronic Musical Instruments Co. in Tianjin, China

CHINA - BEIJING. China's factory gate prices fell at the fastest pace in over seven-and-a-half years in June and missed expectations, while consumer prices were unchanged, as a faltering post-COVID recovery weighed on demand.

The producer price index (PPI) fell for a ninth consecutive month, down 5.4% from a year earlier, marking the steepest decline since December 2015. That compared with a 4.6% drop the previous month, and a forecast for a 5.0% fall.

The consumer price index (CPI) was unchanged year-on-year, compared with the 0.2% gain seen in May, the National Bureau of Statistics (NBS) said. That was the slowest pace since February 2021 and missed the 0.2% rise expected in a Reuters poll of analysts.

Momentum in China's economic recovery has slowed as manufacturing and consumer spending falters.

China last month cut policy rates to boost liquidity and vowed to take measures to promote household consumption.

Beijing has set a target for average consumer inflation in 2023 of about 3%. Prices rose 2% year-on-year in 2022.

Core CPI, excluding the volatile prices of food and energy, rose 0.4% year-on-year, slowing from 0.6% in the previous month.