Data published by the National Bureau of Statistics (NBS) showed that consumer prices rose again in June (for the 5th month in a row), but the growth rate unexpectedly slowed, while producer price deflation persisted. Overall, the latest data strengthened the case for monetary policy easing.
According to the report, the consumer price index rose by 0.2% per annum in June after an increase of 0.3% per annum in May. Economists had expected a 0.4% increase. On a monthly basis, the CPI decreased by 0.2%, accelerating compared to May (-0.1%). Consensus estimates suggested a 0.1% drop. Meanwhile, the core CPI – excluding food and energy prices – rose 0.6% per annum after a similar increase in May.
NBS said that in June, food prices decreased by 2.1% per annum, accelerating compared to May (-2% per annum), despite supply disruptions caused by bad summer weather, underlining the soft demand. Pork prices increased by 18.1% per annum, and beef prices fell by 13.4% per annum. Fresh vegetable prices tumbled 7.3% per annum versus a rise of 2.3% per annum in May. A decline in fresh fruit prices deepened to 8.7% per annum from 6.7% per annum in May.
Separate data showed that in June, the producer price index fell by 0.8% per annum, as expected, after a decrease of 1.4% per annum in May. The fall in the PPI was the smallest in 17 months, mostly attributable to a lower base last year.