China Weak Inflation & Falling Factory Gate Prices Keep Door Open For Policy Easing

RTTNews | 727 days ago

(RTTNews) - China's consumer price inflation increased in May but remained very weak and factory gate prices declined the most in more than seven years, leaving the door open for monetary policy easing to support the struggling economy.

Consumer price inflation rose to 0.2 percent in May from 0.1 percent in the previous month, the National Bureau of Statistics said Friday. However, this was slower than the expected rate of 0.3 percent.

The government aims to keep consumer price inflation at around 3.0 percent this year.

The consumer price index dropped 0.2 percent in May from April, when prices slid 0.1 percent. Prices were expected to fall again by 0.1 percent.

Core inflation that excludes food and energy slowed to 0.6 percent from 0.7 percent a month ago.

Food price inflation accelerated to 1.0 percent from 0.4 percent, while non-food prices remained flat on year. Producer prices declined 4.6 percent on a yearly basis in May, the NBS said in a separate report. This was the biggest fall since February 2016. Economists had forecast prices to drop 4.3 percent after a 3.6 percent decrease in April.

A tightening of labor market is likely to put some upward pressure on inflation later this year, economists at Capital Economics said. Nonetheless, it is set to remain well within policymakers' comfort zone.

The People's Bank of China is expected to ease policy somewhat in the near-term, economists said. But in order to limit the impact on bank margins, the PBoC will favor tools such as window guidance and reserve requirement ratio reductions instead of policy rate cuts, they added.

Tags: CNY

China Manufacturing Activity Contracts For First Time In 8 Months

China's manufacturing activity contracted for the first time in eight months in May as the rise in US trade tariff damped export orders, survey results from S&P Global showed on Tuesday. The Caixin manufacturing Purchasing Managers' Index unexpectedly fell to 48.3 in May, down from 50.4 in April. The score was seen at 50.8.

RTTNews | 2 days ago

China Cuts Loan Prime Rates For First Time In 7 Months

The People's Bank of China reduced its benchmark interest rate for the first time in seven months to stimulate consumption and support the property market amid soothing trade tensions. The central bank lowered its one-year loan prime rate by 10 basis points to 3.0 percent from 3.10 percent.

RTTNews | 16 days ago

China Industrial Output Growth Tops Expectations; Retail Sales Disappoint

China's industrial production increased more than expected in April despite trade tariff hikes and the unemployment rate dropped marginally but growth in retail sales fell short of expectations signalling weaker domestic demand, official data revealed on Monday. Industrial output logged an annual growth of 6.1 percent in April after rising 7.7 percent in March.

RTTNews | 17 days ago

China Exports Growth Beats Expectations; Imports Drop At Slower Pace

China's exports grew more than expected in April despite the sharp contraction in shipments to the United States following the trade tariff hikes, while imports decreased at a meager pace, official data revealed on Friday. Exports advanced 8.1 percent on a yearly basis in April, customs data showed. While the growth rate slowed from 12.4 percent in March.

RTTNews | 27 days ago

China Unveils Monetary Easing Measures

The People's Bank of China reduced its benchmark interest rate and reserve requirement ratio and also unveiled a slew of measures to support economy hit by trade tariffs. The PBoC cut the 7-day reverse repo rate by 10 basis points to 1.4 percent. The new rate takes effect on May 8.

RTTNews | 29 days ago

China Service Sector Growth Softens In April

China's service sector grew at the slowest pace in seven months in April as disruptions to goods trade amid fresh tariffs negatively impacted new work of some service providers, survey data from S&P Global revealed Tuesday. The Caixin Services Purchasing Managers' Index fell to 50.7 in April from 51.9 in March. The reading was forecast to drop moderately to 51.7.

RTTNews | 30 days ago

China Manufacturing Activity Shrinks On Weak Exports

China's manufacturing activity contracted in April as tariff threats damped export orders, official purchasing managers' survey data from the National Bureau of Statistics revealed Wednesday. The official manufacturing PMI slid to 49.0 in April from 50.5 in March. This was the lowest score in 16 months and also remained below forecast of 49.7.

RTTNews | 36 days ago

China Holds Benchmark Lending Rates As Expected

The People's Bank of China left its interest rates unchanged for the sixth successive session on Monday. The central bank retained its one-year loan prime rate at 3.10 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was 3.60 percent, unchanged from the previous month. The decision matched expectations.

RTTNews | 45 days ago

EURUSD	1.14387	GBPUSD	1.35771	AUDUSD	0.65114
USDJPY	143.635	USDCAD	1.36632	USDCHF	0.82028

Advertisement

China Weak Inflation & Falling Factory Gate Prices Keep Door Open For Policy Easing