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Chinese consumer price index inflation picked up in August, although a mild increase from the July inflation figure, while producer price index inflation shrank at the fastest pace in 4 months.
China’s consumer price index, a main gauge of inflation, grew 0.6% on an annualized basis, data from the National Bureau of Statistics showed on Monday, beating expectations of 0.6% and a tick higher than 0.5% in the prior month. On a monthly basis, inflation came in at 0.4%, a modest miss from 0.5% consensus and 0.5% in the prior month.
The annual inflation of 0.7% is the highest since February as Beijing tries to boost domestic demand by cutting interest rates. In a surprise move, PBOC had lowered One-year medium term policy loan rate by 20 basis points to 2.3%, 7-day reverse repo rate by 10 basis points from 1.8% to 1.7% and loan prime rates by 10 basis points in July.
Food prices contributed majorly to the inflation index, having expanded 2.8% against flat print in July as pork prices rose by 16.1%, while vegetable prices surged by 21.8%. Non-food prices edged 0.2% higher, much slower than the prior 0.7% gain.
Core inflation, which strips food and energy costs, increased 0.3% on an annualized basis, the least since March 2021.
China’s producer price index, shrank for 23rd consecutive month at its fastest pace in 4 months, went down 1.8% percent year on year in August, against 1.4% decline in expectations. The decrease widened from 0.8% decrease in July.
China (SHCOMP) -0.92%. The Shanghai Composite fell on Monday on inflation print below expectations, coupled with US markets reporting the worst week in the last 18 months.
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