China's June annual CPI turns flat; PPI continues decline

China's consumer price index (CPI), the main gauge of inflation, came in flat in June compared with the same period last year, the National Bureau of Statistics (NBS) said Monday.

This was lower than the 0.2-percent annual increase in May.

In breakdown, food prices rose 2.3 percent from a year earlier while prices of non-food items edged down 0.6 percent year on year.

The consumer market was generally stable for the month, said NBS in a statement.

Meanwhile, China's producer price index (PPI), which reflects the cost of goods at the factory gate, fell 5.4 percent year on year in June, continuing the downward trend seen last month.

The overall decline in international commodity prices coupled with a relatively high base for the same period last year were reasons for the decline in the PPI data, said the NBS.

China's CPI data in June was mainly affected by off-season consumption, weaker price of pork and slowing growth rate of service prices coupled with PPI's decline, Bruce Pang, chief economist and head of research at JLL Greater China, told CGTN.

Food prices and consequently the CPI in the third quarter may be pressured by pork prices, considering the rapid rise in pork prices last summer, Pang added.

Commenting on the PPI's decline, Pang said that in addition to a continued fall in commodity prices and the high base effect, the factory gate price data also reflects the reality of the weak momentum in real estate and industrial production.

Pang added that the year-on-year decline of the PPI has probably bottomed out, and he expects the decline to gradually narrow in the second half of the year.

Pointing to the external environment that has become "more complex and graver," Pang said China should take economic growth uncertainties in the third and fourth quarters into full account, and attach greater importance to and enhance counter-cyclical policies in maintaining confidence, stabilizing growth and expanding domestic demand.

(CGTN)