China’s PPI Contracts in August, Steepest Decline in Three Years

Posted Tuesday, September 10, 2019 by
Arslan Butt • 1 min read

According to data released by the National Bureau of Statistics, China’s PPI slid lower to -0.8% YoY in August from -0.3% in July. This has been the worst YoY contraction seen in factory gate prices in three years.

Producer price index (PPI) is a key indicator for corporate profits and reveals further strain in the Chinese manufacturing sector over the prolonged trade tensions with the US. The figure has come in better than economists’ forecast, which was for a reading of -0.9%.

Following the release of this news, the Chinese yuan had fallen sharply against the US dollar but has recovered slightly since then. At the time of writing, USD/CNH is trading at around 7.114.

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