Econintersect: Soaring food costs drove China's CPI (Consumer Price Index) to an increase of 2.7% year-over-year in June 2013, up from 2.1% in May. The June number was also higher than the 2.4% inflation reported in April. Underlying deflation continued, however as the PPI (Producer Price Index) showed the 16th consecutive month of year-over-year falling prices. Foe June PPI was -2.7% compared to the same month a year earlier. This was slightly less than the 2.9% decline reported in May and slightly greater than the 2.6% decline in April.
The average annual CPI change reported for the first six months of 2013 is 2.42%.
The average annual PPI change reported for the first six months of 2013 is 2.22%.
There was a curious statement by Li Huiyong, economist at Shenyin & Wanguo Securities ( Shanghai), in Reuters:
"The easing producer price inflation still shows China's economy is struggling with overcapacity problems and weak demand."
The choice of word "easing" is curious when the data for 2013 has shown an an acceleration of deflating PPI through May. A slight slowing of the rate of PPI decline is not really easing inflation the way most would use the term.
- China inflation picks up, limits room for policy easing (Kevin Yao and Xiaoyi Shao, Reuters, 08 Juky 2013)
- China's inflation grows 2.7% in June (Xinhua, 09 July 2013)
- China PPI YoY (Bloomberg, 08 July 2013)