China’s consumer prices rise for third month, factory deflation persists

By Thomson Reuters May 10, 2024 | 8:48 PM

BEIJING (Reuters) -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.

China will use policy tools, such as banks’ reserve requirement ratio (RRR) and interest rates, in a flexible way to step up support for the economy, the Politburo, a top-decision making body of the ruling Communist Party, said in late April.

(Reporting by Joe Cash and Qiaoyi Li; Editing by William Mallard and Clarence Fernandez)