ReutersBEIJING (Reuters) — China’s producer prices unexpectedly showed no growth in June from a year earlier, raising concerns a slowdown in manufacturing activity will further drag on economic growth.
On the other hand, June’s consumer price growth in annual terms matched a 15-month high seen in May as supply shortages triggered by the African swine fever outbreak and extreme weather conditions continued to push up pork and fruit prices.
China’s producer price index (PPI) in June was flat from a year earlier, the National Bureau of Statistics (NBS) said in a statement.
That compared with a 0.6 percent rise in May and a gain of 0.3 percent forecast by economists in a Reuters poll. The change in the PPI was the lowest since August 2016 when the index last fell year-on-year.
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 the authorities to launch more aggressive stimulus.
Upstream sectors were particularly weak, with prices for oil and natural gas extraction down 1.8 percent from a year earlier, the NBS data showed.
Price gains in the coal mining sector also eased.
Although Beijing and Washington reached another truce in their trade war last month, economists expect continuing pressure on the Chinese economy as manufacturers shift more production abroad to avoid U.S. tariffs on China-made goods.