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China's consumer prices rose at a steady rate in May, while producer price deflation moderated slightly, indicating that measures taken by the Chinese government to stimulate the economy are beginning to show positive results.
China's annual inflation rate was 0.3% in May 2024, unchanged The index stabilized for the second month in a row while coming in below market expectations of 0.4%, marking the fourth consecutive month of consumer price inflation, indicating a continued recovery in domestic demand.
On a monthly basis, the CPI fell by 0.1%, the second decline so far this year, missing expectations for a flat reading, after rising by 0.1% in April.
China's producer prices fell 1.4% year-on-year in May 2024, compared to market expectations for a 1.5% decline and after a 2.5% decline in April, marking the 20th straight month of contraction in factory door prices, but the weakest decline since February 2023.
On a monthly basis, producer prices rose 0.2%, the first increase in eight months, retreating from a 0.2% decline in April. Looking at the first five months of 2024, producer prices fell by 2.4%.
Food prices in China fell 2.0% from a year earlier in May 2024, reversing a 2.7% decline the previous month, marking an 11th consecutive month of decline but the slowest pace since February.
Core consumer prices, net of food and energy costs, rose 0.6% year-on-year, compared to a 0.7% rise in April.
The Shanghai Composite Index was flat at 3,028 while the Shenzhen Composite Index rose 0.1% to 9,270 on Wednesday, as weaker-than-expected inflation figures raised hopes for further policy support.
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