China’s PPI Declines at Slower Than Expected Pace, CPI Rises - Forex News by FX Leaders
China's PPI Declines at Slower Than Expected Pace, CPI Rises

China’s PPI Declines at Slower Than Expected Pace, CPI Rises

Posted Monday, August 10, 2020 by
Arslan Butt • 1 min read

Deflation among Chinese factories experienced a reduction during July, boosted by higher oil prices as well as a rebound in activity towards levels seen before the coronavirus pandemic. According to data released by the National Bureau of Statistics (NBS), China’s PPI declined by 2.4% YoY in July, a lower fall than the 2.5% decline in the previous month.

The PPI reading came in better than economists’ expectations, which was for a decline by 3% for July. On a monthly basis, however, PPI was up by 0.4% in July, same as in June, as a result of the recent floods in China.

After bringing the pandemic under control, industrial output in China is on its way back up to pre-pandemic levels, supported by an improvement in demand – both domestic as well as external, as well as stimulus measures by the government. Analysts expect industrial output to continue rising in the coming months, boosted by increased spending by the government towards developing infrastructure, even as economic activity also climbs higher.

Consumer inflation in China also continued to climb higher, boosted by an increase in food prices on account of bad weather. China’s CPI for July rose by 2.7% YoY, better than last month’s rise of 2.5% and economists’ forecast for a rise by 2.6% instead. Meanwhile, core CPI – excluding volatile food and energy prices, increased by only 0.5% YoY in July.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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