Deflation pressures in China eased in August

Price deflation pressures in China eased slightly in August as consumer prices rose and producer prices fell at a slower pace, adding to signs that the worst may be over for some sectors of the world’s second-largest economy.

The National Bureau of Statistics said on Saturday that the Consumer Price Index rose 0.1% last month compared to the previous year. The increase followed a 0.3% decline in July, the first decline in more than two years. Core inflation, which excludes volatile food and energy costs, rose 0.8%.

Producer prices fell 3% in August, compared with a 4.4% decline in July. The deflation of the selling prices of goods in factories before adding transportation costs or retail profits lasted almost a year.

“The annual increase in the CPI came mainly with the support of summer travel, which boosted transport, cultural tourism, accommodation, restaurants and other sectors,”said Bruce bang, chief economist at Jones Lang LaSalle. He added that this is due to factors including the rise in world oil prices and the impact of the rule, which relates to inflation in the same period last year.

These data came as China is looking for evidence that the effects of government stimulus are beginning to appear on the economy and prevent a worsening slowdown. The people’s Bank of China surprised markets last month by cutting interest rates, while local governments accelerated the issuance of special bonds to finance infrastructure projects.

The authorities have intensified monetary easing in the past few weeks by reducing debt payments in major cities and prompting banks to lower interest rates on existing mortgages, in an attempt to inject life into the arteries of the troubled real estate market. She also expanded tax breaks for childcare, parenting and education to stimulate consumption.