Caixin (June 11) reported that data released by China's National Bureau of Statistics (NBS) on June 10, showed that China’s consumer inflation eased to a 14-month low in May, dragged down by moderating gains in pork and food costs, while the decline in prices at the factory gate deepened to a four-year low as oil prices slumped. It said the consumer price index (CPI), which measures the prices of a basket of consumer goods and services, rose 2.4% year-on-year, the fourth straight monthly decline in the inflation rate and down from a 3.3% pace in April. The reading was slightly lower than the median estimate of 2.5% in a Caixin survey of economists. The producer price index (PPI), which gauges changes in the prices of goods circulated among manufacturers and mining companies, fell 3.7% year-on-year last month, steeper than the 3.1% drop in April and the median estimate of a 3.3% decline in the Caixin survey. The data indicate subdued demand in the world’s second-biggest economy as it continues to recover from the impact of the Covid-19 epidemic. The lack of inflationary pressure may make it easier for the central bank to lower interest rates to help stimulate demand.

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