China's latest inflation report card contained few surprises

Photo by Guang Niu/Getty Images

Chinese inflation data released today delivered another dreary and largely predictable outcome in July.

Consumer price inflation (CPI) remains weak while upstream price pressures are moderating after a surge in the past year.

According to China’s National Bureau of Statistics (NBS), CPI rose by 0.1% in June, leaving the increase on a year earlier at 1.4%, the weakest increase since April.

Previously it grew by 1.5% in the 12 months to June, and was expected to remain unchanged.

The NBS said that food prices fell 1.1% over that period, offset by an increase in non-food inflation of 2.0%.

Much of the decline in food prices was due to a decline in pork prices — a staple of the Chinese diet — falling by 15.5%, largely offsetting higher vegetable prices.

Like the CPI figure, producer price inflation (PPI) also offered up few market-moving surprises.

From a year earlier it grew by 5.5%, the same pace seen in the prior two months. That result was also in line with market expectations.

It grew by 0.2% from a month earlier, coinciding with a rebound in base and bulk commodity prices that began in June.

The NBS said the monthly increase largely reflected movements in steel and commodity markets.

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