China: Inflation returns in June but remains minor
Latest reading: Consumer inflation rose 0.1% year on year in June, contrasting May’s 0.1% year-on-year drop in prices and putting an end to four straight monthly price declines. The June reading was above market expectations for no change in prices.
Annual average inflation ticked down to 0.1% in June (May: 0.2%).
Finally, consumer prices dropped 0.10% from the previous month in June, a softer fall than May’s 0.20% fall.
Panelist insight: On the data, Nomura analysts said:
“The CPI uptick was across the board in food, energy, and core inflation. [However,] PPI deflation deepened due to slowing external demand, which strained export-related sectors, alongside persistently weak domestic demand in the property and infrastructure sectors. Fierce supply-side competition and subdued demand have sustained PPI deflation since late 2022. June’s low PPI print further underscores the urgency of supply-side reforms aimed at curbing excess capacity and price competition.”