On September 10, the National Bureau of Statistics of China announced that the country's Consumer Price Index (CPI) fell by 0.4% in August compared to the same month last year.
Previously, economists surveyed by Reuters and Bloomberg had expected a 0.2% decline, but the actual drop was larger than anticipated.
Additionally, the month-on-month change in the CPI for August was flat at 0%. This indicates stronger deflationary pressure than the 0.1% increase forecasted by Reuters.
However, the core CPI, which excludes volatile items such as food and energy, reached 0.9%, the highest level in 18 months.
The Producer Price Index (PPI) for August fell by 2.9% year-on-year, matching the Reuters forecast and narrowing the decline by 0.7 percentage points compared to the previous month (-3.6%). The month-on-month change in the August PPI was also 0%.
Authorities attributed the negative CPI to the base effect from the previous year and lower food prices. They assessed that the rise in core CPI indicates that policies aimed at boosting demand and consumption are proving effective. The narrowing decline in PPI was credited to government efforts to regulate excessive price competition.
Serena Zhou, Chief China Economist for Asia at Mizuho Securities, stated, "Looking at the increases in core and non-food CPI, there are signs that deflation is easing."
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