China’s Consumer Price Index (CPI) remained flat year-on-year in June, according to data released by the National Bureau of Statistics. The CPI rose by 0% year-on-year, lower than the 0.2% increase in May. Experts believe that the flat CPI was mainly due to the fall in pork and refined oil prices, which offset rising prices of vegetables and other products. The overall trend of prices for other commodities and services remained stable. It is expected that prices will bottom out in August and gradually improve.
The prices of food rose by 2.3% in June, an increase of 1.3 percentage points compared to May. Fresh vegetables, potatoes, fresh fruits, and poultry saw higher prices. Non-food items saw a 0.7% increase in prices compared to the previous year, a decrease of 0.2 percentage points from May. The price of services also rose by 0.7% year-on-year.
Wholesale pork prices continued to decline in June while vegetable prices continued to rise. Experts predict that the CPI growth rate will remain low in the coming months, but will gradually rise. The price of pork remains low, and the recovery of demand is limited. The overall supply of industrial products remains abundant, but the gap between supply and demand is narrowing.
In regards to the Producer Price Index (PPI), prices fell by 5.4% year-on-year in June, with the decline mainly due to the continued fall in petroleum, coal, and other industry prices. The PPI decline in June was higher than that in May. The decline was mainly influenced by the performance of weak global demand and the decline in commodity prices.
Experts believe that the PPI will gradually improve year-on-year as macro policies stimulate demand recovery and industrial companies shift from destocking to replenishment. It is predicted that the PPI will start to turn positive year-on-year in the fourth quarter. The high base effect of commodity prices, such as crude oil and coal, will weaken in the second half of the year, leading to an increase in PPI.
Experts suggest that future macro policies should focus on promoting consumption and domestic demand recovery to stabilize economic growth and prices. Policy coordination, forcefulness, and precision are needed to accelerate balanced economic development.