The People’s Bank of China (PBOC) building is seen in Beijing, China, on Tuesday, April 18, 2023. China’s economy grew at its fastest pace in a year in the first quarter, putting Beijing on track to meet this year’s growth target without adding major stimulus and helping to cushion the impact of a global downturn.Source: Bloomberg
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China’s consumer price index rose 0.1% year-on-year in April, the slowest increase since early 2021. The month-on-month decrease was 0.1%.
Economists polled by Reuters expect consumer prices to rise 0.4 percent from a year ago, unchanged from the previous month.
The April data came after China’s inflation rate fell to 0.7% in March after hitting a recent peak of 2.8% in September.
According to the National Bureau of Statistics, China’s inflation rate was led by food and services – food prices rose 0.4% year-on-year, and service prices rose 1% year-on-year. Consumer goods prices also fell 0.4%.
this CNY It was down 0.04% against the dollar at 6.9428 shortly after the release.
China’s producer price index, which measures prices paid by wholesalers, fell 3.6%. Economists polled by Reuters had forecast a 3.2 percent year-on-year decline after a 2.5 percent decline the previous month.
That was in stark contrast to the latest U.S. inflation data released overnight, which showed consumer prices rose 4.9% in April — easing after the Federal Reserve’s efforts to rein in inflation with 10 straight rate hikes.
China’s inflation rate has largely slowed after reopening, prompting market watchers to question whether the world’s second-largest economy is heading toward inflation, Bank of America’s chief China economist Helen Joe wrote in a note Tuesday. austerity.
“It appears that (the People’s Bank of China) should have been at the top of the inflation control scorecard when the major central banks found it difficult to tame the beast,” she wrote.
Qiao added that China has managed to keep its consumer price index inflation rate at an average of 1.8%, close to the lowest three-year average since 2003.
Bank of America economists pointed out that China’s core CPI inflation rate is already far below Japan’s level.
Although not yet at deflationary levels, China’s low inflation may be driven by a lack of demand.
“While households have seen notable pent-up travel demand over the recent holiday season, they remain cautious about spending on goods, especially big-ticket items (white goods, cars, etc.),” Joe wrote in the report.
“Weakness in the labor market and a slowing recovery in the housing market continued to weigh on consumer sentiment,” she wrote.
– CNBC’s Lim Hui Jie contributed to this report
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