Investing.com-- Chinese consumer price index inflation grew more than expected in July, coming after a series of unexpected interest rate cuts by the People’s Bank, while producer price index inflation shrank at a similar pace as the prior month.
CPI grew 0.5% year-on-year, data from the National Bureau of Statistics showed on Friday. The reading was slightly above expectations for growth of 0.3%, and picked up from the 0.2% seen in the prior month.
The increased inflation comes following several more measures from Beijing to increase local liquidity conditions, mainly interest rate cuts by the PBOC.
But Friday’s reading also comes after Beijing vowed in July to roll out more supportive measures for the economy, especially those aimed at boosting consumer demand.
But despite the improved reading for July, Chinese inflation still remained largely languid, amid high unemployment, a sustained property market slowdown and weak consumer sentiment.
PPI inflation shrank for a 22nd consecutive month, although its pace of contraction remained at its slowest since January 2023. PPI inflation shrank 0.8% year-on-year, slightly better than expectations for a 0.9% decline and remaining steady from a 0.8% decline seen in June.
China's manufacturing sector slid further into contraction territory in July, recent purchasing managers index data showed. The sector is a major economic engine for the country, but has been struggling with sluggish demand for nearly four years.