CHINA ECONOMY

China’s producer prices plunge the most in seven years as deflation hangs over economy

PUBLISHED THU, JUN 8 2023 | 9:45 PM EDT | UPDATED FRI, JUN 9 2023 | 12:03 AM EDT
Jihye Lee
@THEJIHYELEE

KEY POINTS
• Economists surveyed by Reuters expected China’s consumer price index to rise 0.3% year-on-year after marking a two-year low of 0.1% in April. Month-on-month, economists predicted a 0.1% decline.
• Recent economic data pointed to a disappointing recovery from China’s strict Covid lockdown measures as the economy struggles with softening demand and falling exports.

Inflation in China stayed at low levels in May, as the economy struggles to recover even after its strict Covid lockdown measures lifted late last year.

Producer price index in May fell 4.6%, marking the steepest year-on-year drop in seven years, when producer prices saw a year-on-year drop of 7.2% in May 2016.

The latest reading fell further from a decline of 3.6% in April and lower than expectations to see a decline of 4.3% in May, according to Reuters poll of economists.

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