China's consumer price in April and its impact on the Chinese economy

Data on Thursday showed that consumer prices #China rose in April at the slowest pace in more than two years, while a slowdown in factory-gate inflation deepened, suggesting more stimulus may be needed to bolster a modest economic recovery after suffering from covid.

- Weak consumer price gains bolstered signals from this week's trade data that domestic demand remained weak, while deflationary impetus in producer prices underscored pressures on factories (a double blow to the world's second-largest economy, while trying to destroy the economy (covid damage) .

- The National Bureau of Statistics (NBS) said the Consumer Price Index (CPI) rose 0.1 percent year-on-year in April, the lowest rate since February 2021, and down from the 0.7 percent annual increase seen in March. , Decreased. The result missed the average growth estimate of 0.4 percent in a Reuters poll.

-Manufacturer contraction #Inflation also deepened last month, which, along with CPI data, highlighted the broader economy's efforts to recover after the lifting of COVID restrictions in December.

- The producer price index (PPI) fell in its fastest decline since May 2020, falling for the seventh month in a row, down 3.6 percent year-on-year after a 2.5 percent drop in the previous month. That was compared to forecasts for a 3.2 percent decline.

China's economy grew faster than expected in the first quarter thanks to the lifting of Covid-19 restrictions, but the recovery has been uneven. Recent data shows that factory activity has slowed, while continued weakness in the real estate market remains a concern.

- Headline inflationary pressures, with core consumer inflation, which strips out volatile food and energy prices, remained unchanged at 0.7 percent from the previous month.

- Statistics Office attributed the decrease in consumer inflation to the base effect. Vegetable prices extended their decline to 13.5%, and pork, the main driver of the CPI, slowed its price growth to 4.0% from 9.6% in March.

Analysts are generally divided on whether the central bank will continue to ease policy, as record credit growth is likely to limit the amount of monetary support it can provide.

Bruce Pang, chief economist at Jones Lang LaSalle, said: China is still in deflation, not deflation.