China's July factory-gate inflation cools as energy costs retreat
China's July producer price inflation slowed to 3.5% year-on-year, below expectations, as consumer price growth also eased to 0.5%.
China's factory-gate inflation lost momentum in July, with producer prices rising at their slowest pace in five months, even as geopolitical tensions in the Middle East kept energy markets on edge.
Official data released on Sunday showed the producer price index (PPI) climbed 3.5% from a year earlier, easing from a 4.1% gain in June. The reading came in below the 3.8% increase economists had projected, suggesting that cooling global energy prices are filtering through to domestic industrial costs.
Consumer-side inflation also moderated. The consumer price index (CPI) rose 0.5% year-on-year in July, down from 1% in the previous month and softer than the 0.8% uptick that had been anticipated. On a monthly basis, consumer prices slipped 0.1%, reversing the 0.3% decline seen in June but still falling short of expectations for a 0.2% gain.
The data points to subdued demand pressures in the world's second-largest economy, even as policymakers continue to support growth. The retreat in energy prices, despite U.S.-Iran tensions, appears to have helped contain broader price pressures across both the industrial and consumer sectors.