China’s consumer prices rose in April for a third straight month, while producer prices extended declines, suggesting resilient domestic demand, despite a shaky economic recovery.
The closely watched numbers follow official surveys showing cooling factory and services activity, as concerns rise about economic growth losing momentum, weighed down by a protracted housing downturn, boosting the case for more policy support.
The consumer price index (CPI) edged up 0.3% in April from a year earlier, accelerating from a rise of 0.1% in March, data from the National Bureau of Statistics (NBS) showed on Saturday.
That was above a rise of 0.2% forecast in a Reuters poll.
CPI rose 0.1% from the previous month, reversing a drop of 1% in March and above a decline of 0.1% predicted by economists.
The producer price index (PPI) dropped 2.5% in April from a year earlier, easing from a slide of 2.8% the previous month and compared with a forecast decline of 2.3%.
Domestic housing demand remains soft, with average daily home sales having slumped 47% over the Labour Day holiday from 2023 levels, while jobless fears linger, notably among young people.
Core inflation, excluding volatile food and fuel prices, grew 0.7% in April, up from 0.6% in March.
In late April, the Politburo stated China would utilize policy tools like banks’ reserve requirement ratio flexibly. These measures aim to bolster economic support.
The continuous uptick in China consumer prices underscores the resilience of the country’s economy. Additionally, the trend bodes well for businesses, as higher consumer spending stimulates production and investment.
Amidst the ongoing recovery, policymakers must monitor China consumer prices closely to ensure stability. Furthermore, proactive measures such as monetary policy adjustments and targeted interventions may be necessary to maintain price stability and foster long-term prosperity.
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