People walk past buildings in Shanghai, China, Friday, April 21, 2023.
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Inflation in China remained low in May as its recovery from strict Covid lockdowns disappointed amid weak demand and falling exports.
China has kept interest rates low compared to other major economies that have aggressively raised rates to fight inflation. Just this week, Canada and Australia unexpectedly raised interest rates.
The producer price index fell 4.6% in May after falling 3.6% in April. Economists expect producer prices to fall 4.3%, according to a Reuters poll.
The reading marked the largest year-on-year decline in seven years.
Government data showed that the consumer price index rose 0.2% in May from a year earlier. Economists polled by Reuters had expected a 0.3 percent increase. The April CPI was at a two-year low of 0.1%.
Prices fell 0.2% on a month-on-month basis – economists had forecast a 0.1% decline.
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