According to the National Bureau of Statistics of China, the Consumer Price Index stood at 0.8% in August (year-on-year), below expectations of 1%, which was the previous month’s figure. In monthly terms, the CPI stood at 0.1%, below expectations of 0.5% and July’s 0.3%.
The National Bureau of Statistics explained that because of the most recent coronavirus outbreaks, as well as the weather, fresh vegetables and eggs prices have surged, while the prices of other food products such as pork have declined due to an increase in supply. Similarly, air tickets, tourism and hotel prices have been constricted because consumption has slowed down.
The Producer Price Index stood at 9.5% in August, above expectations of 9%, which was July’s figure. This is the highest producer inflation in 13 years and is mainly due to the increase in commodity prices, particularly rising coal, chemicals, and steel prices, that has been boosting inflation in the rest of the world.
“Producer price inflation reached its highest since August 2008 last month due to the rally in global commodity prices. But the breakdown suggests that upward pressure on the factory-gate prices of consumer goods is easing,” commented an analyst at Capital Economics. “Coupled with continued declines in food prices, this dragged consumer price inflation back below 1 percent. We think PPI inflation is likely to ease before long while CPI inflation will remain muted this year.”
Just like the rest of the world, China is now dealing with the spread of the Delta variant, which is believed to be more transmissible than other strains and threatens economic recovery. Since the beginning of the pandemic, 95,111 COVID-19 cases have been reported, including 4,636 related deaths. Yesterday, the government reported 28 new cases, an increase from the 19 cases that were reported the previous day.
Vaccinations are also advancing. So far, 2.04 billion doses have been distributed among the local population, with 889 million individuals now fully vaccinated.
By 9:21 GMT, the Chinese yuan gained 0.08% against the US dollar, hitting the 0.1549 level.