Chinese inflation decelerates again

Chinese consumer price inflation (CPI) remains weak.

According to China’s National Bureau of Statistics (NBS), CPI grew 1.8% in the year to April, below the 2.1% level of March and expectations for a smaller deceleration to 1.9%.

Food prices grew 0.7% over the year, a third of the increase reported for non-food items.

At 1.8%, headline CPI remains well below the loose 3% annual rate targeted by the People’s Bank of China (PBoC).

However, while annual growth in CPI slowed, upstream prices accelerated.

The NBS said producer price inflation (PPI) grew 3.4% over the year. While below the 3.5% level expected, it was the faster than the 3.1% level reported in the 12 months to March.

It was the first time in seven months that the annual rate accelerated.

Raw materials and mining-related inflation grew by 5.7% and 6.1% respectively over the year, up from 5.1% and 5% in March.

There has been negligible reaction in financial markets to the release.

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