According to data released on Friday, factory gate inflation in China fell at its quickest rate in seven years in May as spending was restrained by a sluggish post-COVID economic recovery. Consumer inflation in China decreased from the previous month.

1. China’s PPI drops to a 7-year low in May and CPI
continues to decline
According to data released on Friday, factory gate inflation in China fell at its
quickest rate in seven years in May as spending was restrained by a sluggish
post-COVID economic recovery. Consumer inflation in China decreased from the
previous month.
Consumer price index (CPI) inflation in China decreased 0.2 percent in May
compared to the previous month. According to statistics from the National Bureau
of Statistics. This came after a monthly fall of 0.1% in April.
May’s CPI figure of 0.2 percent was slightly greater than the previous month’s
reading of 0.1 percent. But it fell short of expectations for an increase of 0.4
percent.
The report on Friday comes after a run of gloomy business activity & trade data
print over the previous two weeks. Which added to concerns over the nation’s
sluggish economic growth.

2. Despite numerous government stimulus initiatives, spending has also been kept
to a minimum. Over the past three years, Chinese consumers have continued to
be cautious about withdrawing savings. And private investors have avoided
China out of concern for further disruptions and regulatory friction.
The producer pricing index (PPI) inflation in China continued to decrease, and it
did so at its weakest rate since Feb 2016. Which was at the time of the yuan
depreciation shock’s tail end.
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