Beijing, China – Consumer price inflation in China saw a modest increase of 0.2% in June compared to the previous year, falling short of expectations. Meanwhile, producer prices remained in line with forecasts, according to data released by the National Bureau of Statistics. Expectations had anticipated a 0.4% rise in the consumer price index for June, as indicated by a Reuters poll.

The producer price index, which reflects factory-gate prices, experienced a 0.8% decline year-on-year, aligning with predictions. Core CPI, which excludes volatile food and energy prices, saw a 0.6% increase in June compared to the same period last year, slightly slower than the 0.7% rise in the first half of the year.

Notably, pork prices surged by 18.1% in June, while beef prices dropped by 13.4%. Additionally, tourism prices saw a 3.7% increase year-on-year in June, decreasing by 0.8% from May. Zhiwei Zhang, chief economist at Pinpoint Asset Management, expressed concerns about the risk of deflation lingering in China due to weak domestic demand.

Zhang emphasized the importance of exports in supporting growth for China in the first half of the year. The upcoming release of trade data for June on Friday will provide further insights into the country’s economic performance. Compared to major economies like the U.S., China’s low inflation rates have been attributed to lackluster domestic demand.

The ongoing dynamics in China’s economy highlight the complexities and challenges faced by policymakers in addressing inflation and fostering sustainable economic growth. As uncertainties persist, the reliance on exports and the balance between domestic and international demand will continue to shape China’s economic trajectory in the coming months.