By Yara Abi Farraj
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China’s consumer prices rise 0.3 percent in April, producer prices decline 2.5 percent

Decline in manufacturing and services activity raises recovery concerns
China’s consumer prices rise 0.3 percent in April, producer prices decline 2.5 percent
With consumer prices increasing, domestic demand across China shows signs of recovery

In April, China’s consumer prices saw a 0.3 percent annual increase, marking the third month of growth, according to the latest data from the National Bureau of Statistics (NBS). Meanwhile, producer prices extended their 1.5-year-long decline with a 2.5 percent annual drop, signaling an improvement in domestic demand as the country navigates economic uncertainty.

The latest data also reveals that core inflation in China saw a 0.7 percent increase in April, up from 0.6 percent in March. Meanwhile, the consumer price index (CPI) rose 0.1 percent compared to March.

Market participants view China’s growth as unsustainable due to a decline in activity in the manufacturing and services sectors. Earlier, the NBS reported a decline in China’s manufacturing purchasing managers’ index (PMI) from 50.8 in March to 50.4 in April. Moreover, it reported a decline in services from 52.4 in March to 50.3 in April, the weakest pace of growth since January. In addition, the country’s housing crisis shows no sign of recovery, signaling continuous economic instability.

With consumer prices increasing, domestic demand across China shows signs of recovery. However, they remain low as the manufacturing sector faces price pressures, reflecting insufficient demand. Annually, producer prices declined 2.5 percent in April, slightly easing from the 2.8 percent decline in March.

Read: IMF maintains Nigeria growth forecast at 3.3 percent in 2024, inflation to decline to 24 percent

Last week, the People’s Bank of China announced that it will adjust its monetary policy to support the recovery in consumer prices and propel economic recovery. The central bank will use tools such as banks’ reserve requirement ratio (RRR) and interest rates to support economic growth.

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