China's Consumer Prices Rise 0.1% in August...Easing Deflation Concerns

China's consumer prices returned to an increase just one month after recording a decline.

A citizen in Beijing, China is selecting tomatoes at a supermarket. / Photo by Yonhap News

China's National Bureau of Statistics announced on the 9th that the consumer price index (CPI) in August rose by 0.1% year-on-year and 0.3% month-on-month. This is slightly lower than the market forecast of 0.2%.

Food prices fell by 1.7%, while non-food prices rose by 0.5%. Goods prices dropped by 0.7%, and service prices increased by 1.3%. The cumulative consumer price index from the beginning of this year to August rose by 0.5% compared to the same period last year.

The producer price index (PPI) for August, released on the same day, fell by 3.0% year-on-year. This is a smaller decline compared to the previous month (-4.4%). China's PPI has been declining for 11 consecutive months since recording -1.3% in October last year.

With consumer prices rising and the decline in producer prices easing, China has alleviated concerns about deflation (a drop in prices amid economic slowdown).

As various economic indicators continue to show weakness, the People's Bank of China, the central bank, has taken active measures to stimulate the economy, including deciding to cut interest rates.

Major foreign media, citing experts, pointed out that the labor market recovery is slowing and expectations for household income are uncertain, suggesting that more policies seem necessary to boost consumer confidence.