China's Inflation Rises for the First Time in 5 Months - Jordan News

Jordan News

2 days ago

Consumer prices (inflation) in China rose for the first time in five months in June, while producer prices continued to decline, reflecting the country's ongoing struggle with global trade tensions and weak domestic demand. اضافة اعلان According to data released by the National Bureau of Statistics on Wednesday: The Consumer Price Index (CPI) rose by 0.1% year-on-year in June, compared to a 0.1% decline in May, exceeding Reuters analysts' expectations of no change. On a monthly basis, the CPI fell by 0.1%, compared to a 0.2% drop in May, in line with economists' forecasts. Meanwhile, the Producer Price Index (PPI), which measures factory-gate prices, fell by 3.6% year-on-year in June, deeper than the 3.3% decline recorded in May and marking the sharpest drop since July 2023. Reuters had forecast a 3.2% drop. Export-Driven Sectors Face Growing Pressure China's export-reliant industries are under mounting pressure from global trade headwinds. Manufacturing prices in sectors such as computers, telecommunications, and electronics saw accelerated declines last month, signaling weak global demand. Uncertainty stemming from U.S. President Donald Trump's tariff policies has further clouded the outlook for export-reliant firms, especially given persistent weak domestic consumption. Dong Liguang, chief statistician at the National Bureau of Statistics, said the drop in producer prices was partly due to severe weather impacting construction activity, putting pressure on raw material prices, according to Bloomberg News. Coal Demand Drops Amid Renewable Energy Expansion Factory-gate prices in coal mining and washing plunged 22% year-on-year, the sharpest decline since 2007. The decline is attributed to China's rapid expansion of renewable energy, reducing coal demand. On the consumer side, prices saw a modest uptick, supported by recovering oil and industrial commodity prices. The annual deflation rate in consumer prices eased from -1.0% to -0.5%. Gold, Textiles, and Electronics See Gains Gold and platinum jewelry prices rose 39% and 16%, respectively. Home textiles and electrical appliances also saw notable price increases. The decline in automobile prices slowed compared to previous months. The electronics and auto sectors likely benefited from a major government purchase subsidy program, though it was temporarily halted in some provinces last month due to funding shortages. Authorities have since pledged to inject additional funds to revive the program. Consumer Confidence Still Weak However, economists warn that Beijing must take more sustainable steps to restore consumer confidence. A new Bloomberg Economics consumer sentiment index showed that despite increased policy support since late 2024, overall public sentiment has remained subdued due to limited improvements in job prospects and income growth.
Deflationary pressures have also worsened due to overcapacity in several sectors. Despite promises to cut production, analysts caution that "price wars" could persist for years as local governments try to avoid mass layoffs and their social consequences.