China's July CPI slows to 0.5% year-on-year rise, PPI also moderates to 3.5% increase
Macro
China's National Bureau of Statistics announced on the 9th that the July consumer price index rose 0.5% year-on-year, slowing from a 1% increase in June and marking the lowest growth in six months, undershooting market expectations of a 0.8% rise. The producer price index rose 3.5% year-on-year, moderating from a 4.1% increase in June and hitting a three-month low, also below the forecast 3.8% rise. The CPI fell 0.1% month-on-month, the second consecutive monthly decline, while the core CPI, which excludes food and energy, rose 0.9% year-on-year and food prices dropped 1.5%. Easing global energy price rises formed the backdrop, with a senior China strategist at ANZ pointing to falling crude oil prices and weakening demand as factors behind the undershoot, and expressing the view that the effects of accelerated fiscal spending in the second half of the year will appear with a lag.
