BEIJING (Reuters) – China’s factory deflation eased in July, as global oil prices rose and industrial activity rebounded to pre-coronavirus levels, adding to further signs of economic recovery. second largest in the world.
FILE PHOTO: A worker is seen at the hot-rolled production line at Chongqing Iron and Steel plant in Changshou, Chongqing, China August 6, 2018. REUTERS / Damir Sagolj
The Producer Price Index (PPI) was down 2.4 percent from a year earlier in July, the National Bureau of Statistics (NBS) said in a statement on Monday, compared with a 2.5 percent drop. in the Reuters analysts polls and a 3.0% decline. in June.
Analysts say China’s industrial output is slowly returning to levels seen before the pandemic crippled its huge economy, as demand is stifled, government stimulates and exports are likely surprising recovery.
Futures prices in Dalian have risen by more than 50% this year, while rebar used in construction has risen 12%.[IRONORE/]
According to Dong Lijuan, senior statistician at NBS, gasoline and natural gas prices led a significant increase, up 12% from the previous month, thanks to the continued recovery of global crude oil prices, according to Dong. Lijuan, senior statistician at NBS. Coal mining and car production prices also saw positive changes in July.
“The extra fiscal stimulus will continue to drive infrastructure spending in the coming months, supporting the recovery,” said Julian Evans-Pritchard, China senior economist at Capital Economics. further recovery in economic activity and producer prices ”.
However, PPI rose 0.4% monthly, unchanged from the increase in June, pointing to construction and manufacturing tensions due to recent flooding in southern China. Some economists warn the recovery could be stalled amid cautious consumer spending and a resurgence of global infections.
Consumer inflation also increased in July as bad weather pushed up food prices.
The consumer price index (CPI) rose 2.7% from a year ago, the fastest pace in three months and compared with the expected 2.6% and 2.5% increase in June.
The main reason is due to the sharp increase in the price of pork, up 85.7% over the same period last year.
However, core inflation, excluding food and energy costs, rose only 0.5% in July from a year earlier.
“The expected higher price increases will reinforce the determination of the monetary authorities to normalize policies,” said Hu Yuexiao, chief macro analyst at Shanghai Securities.
Reports by Yawen Chen and Se Young Lee; Edited by Sam Holmes