Chinese consumer inflation weakened slightly in July, while producer prices expanded at a steady pace, government data revealed Wednesday.
The July consumer price index (CPI) advanced 1.4% from a year earlier, slightly below the previous month’s gain of 1.5%, the National Bureau of Statistics said in a report. Analysts in a median estimate called for a 1.5% increase.
Compared to June, consumer inflation rose 0.1%. It fell 0.2% the previous month.
Beijing’s key inflation reading has stumbled this year after climbing above 2% annually at the end of 2016. The People’s Bank of China (PBOC) hopes to keep inflation under 3% this year.
China’s July producer inflation rose from a year earlier for the 11th straight month, official data showed. The producer price index (PPI) rose 5.5% in July, unchanged from the previous month.
Recovering PPI-inflation has largely driven China’s stronger than expected growth in recent quarters. Gross domestic product (GDP) expanded 6.9% annually in the June quarter.
Producer prices have been stimulated by fiscal policy and other measures aimed at resolving the nation’s overcapacity constraints. As one might expect, heavy industry has driven the resurgence of factory-gate prices over the past year.
Strong infrastructure spending through the first half of 2017 should help Beijing secure its target growth rate of 6.5% this year.
Back in June, the International Monetary Fund (IMF) boosted China’s 2017 GDP growth target to 6.7%. However, the Washington-based lending institution urged the Chinese government to accelerate reform progress to “secure medium-term stability.”
On Tuesday, Beijing posted a stronger than expected July trade surplus of $46.74 billion. Exports were up 7.2% year-over-year. Imports climbed 11% over the same period.
By Sam Bourgi