Econintersect: A deluge of economic numbers have been released in China and the overall effect is that the economy is weakening, but not as much as some had feared after the PBoC (People’s Bank of China) cut interest rates earlier this week. (See GEI News.) One of the most important numbers was the official May inflation rate from the National Bureau of Statistics (NBS). CPI (Consumer Price Index) was up 3.0% year over year while PPI (Producer Price Index) was down 1.4% from a year ago. Both numbers were weaker than expected. Inflation has fallen sharply over the past year. Just ten months ago CPI was 6.5% and PPI for final goods was 7.5%. The intermediate goods PPI was 11.0% last July. The data for 1Q 2012 showed the PPI for agricultural products down 5.6% year-over-year and 9.4% in six months (-18.7% annual rate).
No one seems to be commenting on it but the rapidly deflating PPI numbers should start raising the possibility that China could enter deflation.
Some of the other data announcements:
- Industrial output rose 9.6% (9.9% expected).
- Food inflation remained high at 6.4%, despite large declines in the PPI for agricultural products.
Below are the latest charts published by the NBS which contain data only through April.
- National Bureau of Statistics of China (Official Website)
- China economy weak in May, inflation at 2-yr low (Reuters, The Times of India, 9 June 2012)
- China Cuts Key Interest Rates, Combats Fraud, Bad Loans and Manufacturing Slowdown (GEI News, 7 June 2012)