CHINA FACTORY GATE PRICES FALL; CONSUMER PRICES RISE
China’s annual factory gate prices fell at a faster-than-expected pace in September and consumer prices rose at their slowest pace in 19 months, underscoring the challenges China faces as it tries to recover from the COVID-19 pandemic, Stella Qiu and Ryan Woo reported for Reuters
The producer price index (PPI) fell 2.1% from a year earlier, marking the eighth straight month of declines, the National Bureau of Statistics NBS) said in a statement. That compared with a 2.0% drop in August and expectations for a 1.8% decline in a Reuters poll. On a monthly basis, PPI rose 0.1%, after increasing by 0.3% in August.
China’s economy has seen a steady recovery after a dismal first quarter when most of the country was shut down due to the COVID-19 pandemic. Factory activity expanded at a faster-than-expected rate in September.
But a cooling in producer prices, seen as a gauge of industrial demand that gives momentum to investment and profits in the Chinese economy, may rekindle worries about deflation and prompt authorities to launch more aggressive stimulus, analysts said. NBS data also showed China consumer price index rose by 1.7% in September from a year earlier, its slowest increase since February 2019. Economists had expected the consumer price index to increase 1.8% after a 2.4% rise in August.