Chinese disinflationary pressures have intensified in May.
According to China’s National Bureau of Statistics consumer price inflation increased by 1.2% in the 12 months to May. The figure was below the 1.5% pace recorded in April and below market expectations for a decline to 1.3%.
A sharp deceleration in food price inflation, up 1.6% in May from 2.7% in April, was the chief catalyst behind the soft headline print. Excluding food, prices increased by 1.0%, the largest increase seen since November 2014.
Signalling that upstream price pressures remain non-existent producer price inflation fell by 4.6% in the year to May, unchanged from that reported in April, with the decline the 39th consecutive month that prices have fallen.