Inflation in China increased modestly in April, data from the National Bureau of Statistics revealed Thursday. Though inflation was above expectations, it still remained subdued giving the central bank more room for policy maneuver if economy weakens further.
The rate of inflation measured by the consumer price index rose to 2.4 percent in April from 2.1 percent in March. This was also higher than the expected 2.3 percent inflation.
Inflation has been running comfortably below the government's new target of 3.5 percent so far this year. This is expected to give the central bank more room to tweak policy to address the new challenges, including slowing economic recovery.
However, strong capital inflows and rising property prices may still keep the authorities on guard for possible re-emergence of price pressures.
Food inflation rebounded to 4 percent last month after easing to 2.7 percent in March. The statistical office attributed this increase to a 5.9 percent jump in vegetable prices. Meanwhile, the rate of increase in prices of non-food articles eased slightly to 1.6 percent from 1.8 percent in March.
The bureau said clothing prices gained 2.5 percent from a year earlier, while costs of transportation and communications fell 1.1 percent. Housing costs increased 2.9 percent annually.
Separately, the statistical bureau reported that China's producer prices declined 2.6 percent year-on-year in April compared with expectations for a 2.3 percent fall. This followed a 1.9 percent drop in the previous month.
China plans to move towards full convertibility of yuan as it pushes ahead with its economic reforms this year. The State Council, led by Premier Li Keqiang, put forward a set of proposals to loosen government control over the exchange rate and the monetary policy on Monday as part of these reforms.
China's economic growth eased to 7.7 percent in the first quarter from 7.9 percent expansion in the fourth quarter.
While the most recent purchasing managers' survey pointed to a slowdown in both manufacturing and service sector activities at the start of the second quarter, a slew of economic indicators, including industrial output, fixed investment and retail sales, to be published on Monday are expected to give more insight into the current state of the economy.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.