BEIJING: China’s factory-gate prices fell less than expected in June, official data showed, as the country works towards recovering from the coronavirus while grappling with a heavy blow to global demand.
The producer price index (PPI) fell three percent from a year ago -- improving from four-year lows the month before, according to National Bureau of Statistics data.
The pick-up comes as prices of international commodities saw some recovery in June, as the domestic manufacturing industry and market demand also improved, said NBS senior statistician Dong Lijuan in a statement.
Analysts polled by Bloomberg had expected PPI to fall 3.2 percent.
China’s consumer price index (CPI) came in at 2.5 percent, a 0.1 point rise from May, on the back of a pick-up in food prices and in line with forecasts.
In particular, pork prices, a driving factor behind surging inflation last year, rose 81.6 percent on-year in June, a similar pace to the month before.
Dong noted that factors behind the rise included a slower rate of pig slaughtering, stricter requirements because of epidemic-prevention measures, and a drop in imports, all of which led to tighter supply of the staple meat.
China has been working to bounce back from a historic economic contraction in the first quarter caused by the coronavirus, which brought economic activity to a near-halt.
But the world’s second-largest economy now faces weakening global demand as the virus hammers key trading partners.
Moody’s Analytics said in a recent report that although production activity and exports continue to recover, domestic demand remained relatively soft until May.
“While an increase in economic activity should improve employment conditions and aid consumption, we expect confidence to stabilise gradually, which is expected to moderate the price increase in June,“ said Moody’s.
In early June, Beijing saw a new coronavirus cluster break out at a massive wholesale market, adding to concerns around food supplies. -AFP
