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China’s inflation numbers miss expectations, rising 0.2% in June

Consumers are shopping at a supermarket in Qingzhou, China, on June 12, 2024. 

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BEIJING — China’s consumer price inflation rose by 0.2% in June from a year ago, missing expectations, while producer prices fell in-line with forecasts, data from the National Bureau of Statistics on Wednesday showed.

China’s consumer price index was expected to rise by 0.4% year-on-year in June, according to a poll by Reuters.

The producer price index, which measures factory-gate prices, dropped by 0.8% from a year ago — in line with expectations.

Core CPI, which strips out more volatile food and energy prices, rose by 0.6% year-on-year in June, slightly slower than the 0.7% increase for the first six months of the year.

The risk of deflation has not faded in China. Domestic demand remains weak.

Zhiwei Zhang

chief economist, Pinpoint Asset Management

Pork prices surged by 18.1% in June from a year ago, while beef prices fell by 13.4%. Tourism prices rose by 3.7% year-on-year in June, down by 0.8% from May.

“The risk of deflation has not faded in China. Domestic demand remains weak,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.

He added that China would rely on exports to support growth in the first half of the year.

The country is scheduled to release trade data for June on Friday.

Lackluster domestic demand in China has kept inflation low, in contrast to major economies such as the U.S. where prices have remained elevated.

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