China’s PPI Data Points to Economic Recovery

Factory gate prices across Chinese companies declined for the seventh consecutive month during August, but at the slowest pace since March

Financial markets got the OK from China

Factory gate prices across Chinese companies declined for the seventh consecutive month during August, but at the slowest pace since March, reinforcing hopes of economic recovery. Data released by the NBS reveals that PPI fell by 2% YoY in August, a smaller decline than the 2.4% fall seen in the previous month.

Meanwhile, China’s CPI increased by 2.4% YoY, growing at a slower pace than the 2.7% rise seen in July. Both readings were in line with economists’ forecasts.

Senior statistician at NBS, Dong Lijuan, notes, “In August, industrial production continued to improve while market demand kept recovering. Prices for global commodities such as crude oil, iron ore and non-ferrous metals continued to rise, driving a rebound in domestic factory gate prices.”

After bringing the coronavirus outbreak under control, China’s economy returned to growth during Q2 2020. Recent economic data releases also point to a rebound in economic activity and domestic consumption across the country; however, the trade reliant economy faces risks due to a weakness in external demand as most parts of the world are still registering an increase in the number of cases.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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