China’s PPI, CPI Miss Expectations in September
Annual factory gate prices across China declined for the eighth consecutive month while consumer prices increased at the slowest pace seen
Annual factory gate prices across China declined for the eighth consecutive month while consumer prices increased at the slowest pace seen in 19 months during September. The latest data highlights worries about economic recovery in China, the first country in the world to bring the coronavirus pandemic under control and reopen its economy.
According to data released by the NBS, China’s PPI was down by 2.1% YoY in September, a sharper fall than the 2% decline seen in August and the 1.8% fall forecast by economists. On a monthly basis, September’s PPI increased by 0.1% since August, but the rate of increase was less than the 0.3% MoM rise seen in the previous month.
Meanwhile, China’s CPI came in at +1.7% YoY for the month of September, marking the weakest reading seen since February 2019. The figure also came in below the previous month’s reading of +2.4% and lower than economists’ forecast of +1.8%. Core CPI, which excludes volatile food and energy prices, increased by 0.5% YoY for the period.
China’s economy had been posting a strong recovery after the strict lockdowns imposed in Q1 to contain the pandemic. However, the cooling off in PPI and CPI are raising worries about possible deflation, which could drive the government to roll out more stimulus initiatives.
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