Decline in CPI and PPI Highlights Lingering Economic Challenges

The National Bureau of Statistics released data indicating a 0.3% drop in the consumer price index (CPI) inflation over the 12 months ending July.

PPI inflation shrank by 4.4% in July, surpassing the anticipated 4.1% decrease.

This weak inflation data coincides with reports of deteriorating Chinese exports and imports in July, coupled with worsened business activity.

As inflation worsens, the People’s Bank of China may implement further liquidity measures, including potential mortgage and deposit rate cuts, to support the economy.