China: Consumer Prices Increase at Slowest Pace in Two Years

Data released today, Thursday, shows that "consumer prices in China rose at their slowest pace in over two years in April, while producer prices at the factory gate saw a deeper decline, indicating a potential need for further stimulus to boost the uneven economic recovery following the COVID-19 pandemic." The National Bureau of Statistics stated that "the consumer price index increased by 0.1% year-on-year in April, the lowest rate since February 2021, down from a 0.7% annual increase in March. This outcome was contrary to the average expectations in a Reuters survey, which predicted a rise of 0.4%." The decline in producer prices last month, alongside the consumer price index data, highlights the difficulties the broader economy faces in recovering after lifting COVID restrictions in December. The weak rise in consumer prices also aligns with trade data this week indicating that domestic demand remains weak.