China's Consumer Price Index Rises 0.3% in April... Up for Three Consecutive Months

Concerns Over China's Economic Deflation Ease
Producer Price Index Declines for 19th Consecutive Month

China's Consumer Price Index (CPI) for April rose 0.3% year-on-year, continuing its upward trend for the third consecutive month.

The National Bureau of Statistics of China announced on the 11th that the April CPI increased 0.1% month-on-month. Consumer prices from January to April rose 0.1% compared to the same period last year.

Following a 0.7% year-on-year increase in February due to the Spring Festival (Chinese New Year) effect, marking a return to an upward trend after six months, the CPI continued to rise for three consecutive months through March (0.1%) and April.

The National Bureau of Statistics evaluated that "In April, consumer prices turned upward both year-on-year and month-on-month, and overall consumer demand continued to recover."

There is an analysis suggesting that concerns about deflation surrounding the Chinese economy are likely to diminish somewhat.

In April, non-food prices rose 0.9%, but food prices fell 2.7%, leading the overall decline. Commodity prices remained flat (0%), while service prices increased by 0.8%.

Among food items, beef plunged 10.4%, with eggs (-10.6%) and fruits (-9.7%) also experiencing significant declines. Pork prices, which had been sharply falling, rose 1.4% year-on-year.

The Producer Price Index (PPI) for April fell 2.5% compared to a year earlier. Although the decline narrowed compared to the previous month (-2.8%), the PPI has recorded negative growth for 19 consecutive months since October 2022, when it was -1.3%. This marks the longest period of negative growth since 2016.

The National Bureau of Statistics stated, "In April, although demand in some industries gradually decreased, industrial production continued to recover, reducing the year-on-year decline."

Nevertheless, China's manufacturing sector has not fully revived overall, and it is expected that pressure will increase on the Chinese government to introduce more economic stimulus measures.

Earlier, the state-run media China Securities Journal forecasted on the 8th that Chinese authorities are highly likely to cut the reserve requirement ratio within the second quarter of this year.