China’s consumer price inflation eased in June on falling food prices and factory gate price growth slowed, driven by the leveling off in global commodity prices, data from the National Bureau of Statistics showed on Friday.
Consumer prices rose 1.1 percent year-on-year in June, slower than the 1.3 percent increase seen in May. The rate was forecast to remain unchanged at 1.3 percent.
Core inflation that excludes food and energy prices, held steady at 0.9 percent in June.
Food prices declined 1.7 percent due to a 36.5 percent fall in pork prices. Meanwhile, non-food prices advanced about 1.7 percent in June.
The plunge in pork prices is likely to be a drag on food inflation for a while longer, Julian Evans-Pritchard and Sheana Yue, economists at Capital Economics, said. This should keep headline inflation below 2 percent even if, core inflation gradually returns to more normal levels.
Concerns about price pressures in China look set to ease over the coming months, with inflation likely to settle at a level that is unlikely to trigger any shifts in monetary policy, the economists said.
People’s Bank of China Governor Yi Gang, said last month that consumer price inflation is likely to remain below 2 percent in 2021, which is below the government’s target of around 3 percent.
Another report from the NBS showed that factory gate inflation came in at 8.8 percent in June, in line with economists’ expectations, and down from 9 percent in May.
Nonetheless, producer price inflation remained at an elevated level.
Dong Lijuan, a senior statistician at the NBS, said policies taken by the government to ensure supply and stabilize commodity prices started to show results. The supply-demand relation seems to improve and industrial product price growth slowed down to a certain degree.
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