China’s consumer prices were flat y/y in July, as government efforts to rein in excessive competition offered some relief from deflationary pressures. Analysts caution that the path out of deflation will be long and may require stronger stimulus measures.
Consumer Price Index (YoY) (July) 0.0%,
no change from a year earlier, beating forecasts for a small declinea second month without negative readingsexpected -0.1%, prior +0.1%
Consumer Price Index (MoM) (July) +0.4%
expected +0.3%, prior -0.1%
Producer Price Index (YoY) (July) -3.6%
factory-gate prices continued to fallproducer price index down for the 34th consecutive month of producer deflationexpected -3.3%, prior -3.6%
Authorities have launched a campaign to curb price wars (Chinese policy shift to “Anti-involution”) that have been squeezing company profits and wages, but analysts warn that deeper problems remain. Household expectations for future prices have weakened, and the GDP deflator — a broad gauge of economy-wide prices — has now fallen for nine straight quarters, the longest decline in decades.