China’s inflation stabilizes near zero levels for the second month

On Friday, official figures revealed that China’s inflation rose slightly in May, but was still close to zero levels for the second month in a row, with declining product prices and indications of slowing demand and a complex environment for companies.

The National Bureau of Statistics said the annual consumer price index rose in May to 0.2%, compared with 0.1% the previous month, which was in line with experts’ expectations of Bloomberg.

Far from the increases recorded in developed countries, China’s food prices did not change much in a single year (+ 0.1%) nor those of consumer goods (-0.3%) and services (+ 0.9%).

Production prices (factory exit prices) recorded a further decline in an indication of slower domestic demand and lower costs for raw materials such as iron and crude oil.

China’s PPI fell 4.6 percent in May, according to the Census Bureau, continuing its contraction for the eighth consecutive month, and a larger proportion than Bloomberg analysts expected (-4.3 percent). This is his weakest pace since 2016.

The decline in this indicator is explained by “lower international raw material prices in general and relatively weak demand for industrial products in China and abroad”, according to Dong Lijuan, an analyst with the Office for National Statistics.