Chinese inflation still struggling to rebound despite broader recovery

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Chinese inflation still struggling to rebound despite broader recovery




FILE PHOTO: Masked workers work at a baijiu liquor distillery in Xishui


© Reuters/CHINA DAILY
FILE PHOTO: Workers wearing masks work at a baijiu liquor distillery in Xishui


BEIJING, Oct 15 (Reuters) – Chinese ex-factory prices fell faster than expected in September and consumer inflation fell to its lowest level in 19 months, highlighting the problems it still faces. China to recover from the COVID-19 pandemic.

The producer price index (PPI) fell for the eighth consecutive month on an annual basis, while consumer prices rose more slowly than expected.

The world’s second-largest economy has seen a steady recovery after being hit hard by the coronavirus in the first quarter. However, a sustained drop in producer prices – which is seen as an indicator of industrial demand – could reignite concerns about deflation and prompt authorities to offer more stimulus, analysts say.

PPI fell 2.1% in annual rate, the National Statistics Office said in a statement. Economists polled by Reuters had expected the rate to slow to 1.8% after falling to 2.0% in August. In monthly terms, the PPI rose 0.1%, after increasing 0.3% in August.

China’s gross domestic product grew 3.2% year-on-year in the second quarter, and recent data points to a sustained rebound, supported by government stimulus and tackling the virus. China publishes GDP data for the third quarter on Monday.

(Information from Stella Qiu and Ryan Woo; edited by Ana Nicolaci da Costa; translation by Jorge Martínez)

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