China’s consumer inflation picks up slightly in May as factory-gate prices decline

43

9th June 2023 – (Beijing) According to official data released on Friday by the National Bureau of Statistics, China’s consumer inflation picked up marginally in May, while factory-gate price decline sped up due to weaker demand. The consumer price index, a main gauge of inflation, climbed 0.2 percent from a year earlier in May, up from the 0.1 percent gain in April. Food prices rose by 1 percent in May compared with a year ago, up from the 0.4 percent rise in April. Pork, a staple in Chinese cuisine, saw prices decline by 3.2 percent in May after a 4 percent rise in April.

Notably, prices for industrial consumer products declined 1.7 percent in May after a 1.5 percent fall in April. On a month-on-month basis, May’s CPI dipped 0.2 percent after a 0.1 percent decline in April.

The producer price index, which gauges factory-gate prices, was down 4.6 percent from a year earlier in May, compared with the 3.6 percent annual contraction seen in April. On a month-on-month basis, PPI dipped 0.9 percent in May after a 0.5 percent decline in April.

The growth in core CPI, which excludes volatile food and energy prices and is deemed a better gauge of the supply-demand relationship in the economy, rose by 0.6 percent year-on-year in May, down from a 0.7 percent rise in April.

Dong Lijuan, an NBS statistician, said the consumer inflation picked up marginally with the gradual recovery in consumer demand, while the fall in factory-gate prices was affected by declining international commodity prices, weak demand for industrial products at both home and abroad, as well as a high comparison base in the previous year. The data suggests that China’s economic recovery from the pandemic remains uneven, with some sectors such as food seeing price gains while others, particularly industrial goods, experience price declines.