China inflation grows at slowest rate in over two years
CHINA’S inflation rate edged up 0.1 per cent year-on-year in April, the slowest rate recorded since 2021, official figures showed on Thursday (May 11), signalling a weak recovery after lifting pandemic curbs.
Producer prices fell for the seventh consecutive month due to sluggish domestic demand and lower commodity costs, data released by Beijing’s National Bureau of Statistics (NBS) showed.
April’s consumer price index (CPI), the main gauge of inflation, was the lowest level recorded since February 2021 and fell below the 0.3 per cent increase forecast by analysts polled by Bloomberg.
In March, China’s CPI was 0.7 per cent.
Food prices – a major component of the inflation basket – increased by only 0.4 per cent in April, compared to the previous year.
April’s figure was also affected by last year’s high base for comparison, NBS analyst Dong Lijuan said in a statement.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Food prices were high in April 2022, as Covid lockdowns in several major cities including Shanghai squeezed supply.
“The subdued inflation readings suggest post-Covid recovery momentum continued to weaken in April,” Ting Lu, chief China economist at Nomura, said.
“Looking ahead, given still softening food prices... subdued fuel prices, the elevated unemployment rate... we expect CPI inflation to remain fairly soft in May,” he added.
China’s inflation figures were in stark contrast to the latest data in the United States, where consumer prices rose by 4.9 per cent in April as the Federal Reserve attempted to tame escalating prices by hiking rates 10 consecutive times.
China’s service prices rose one per cent in April compared to the previous year and up from the 0.8 per cent recorded in March, according to NBS data, as consumers spent more on travel and other leisure services.
“The economic recovery seems unbalanced at this stage, with the service sector normalising... while the manufacturing sector (remains) muted,” Zhiwei Zhang of Pinpoint Asset Management wrote in a note.
China’s producer price index, which measures prices paid by wholesalers, fell 3.6 per cent in April compared with the previous year.
The decline was due to the fall in the global price of raw materials such as iron ore and crude oil.
China has set a growth target of around five per cent this year, the lowest goal in decades, with premier Li Qiang warning it “will be no easy task”. AFP
Share with us your feedback on BT's products and services
