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China's Inflation Slows Slightly, PPI Inflation Steady At 5.5%

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China's inflation eased slightly in July and producer price inflation remained stable on rising commodity prices.

Inflation eased to 1.4 percent in July from 1.5 percent in June, the National Bureau of Statistics reported Wednesday. Economists had forecast the rate to remain unchanged at 1.5 percent.

Inflation was well below the government's target of around 3 percent for the whole year of 2017.

Food prices declined 1.1 percent following June's 1.2 percent decrease. Non-food prices climbed 2 percent versus 2.2 percent increase in June.

On a monthly basis, consumer prices edged up 0.1 percent, in contrast to a 0.2 percent drop in June. This was the first increase in three months.

The upshot is that with policy tightening now weighing on economic activity, underlying inflation has already begun to decline, Julian Evans-Pritchard, an economist at Capital Economics, said.

With growth likely to slow further in the coming quarters, the pick-up in price pressures witnessed during the past year will continue to unwind, the economist added. This will disappoint those hopping for a sustained period of reflation that could help to erode corporate debt burdens.

Another report from NBS showed that producer price inflation held steady at 5.5 percent in July. Prices were forecast to climb 5.6 percent.

Month-on-month, producer prices rose 0.2 percent, offsetting a 0.2 percent fall in June.

by RTT Staff Writer

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