By Gina Lee
Investing.com – China saw annual factory gate prices fall at a faster-than-predicted pace, while consumer prices rose at their slowest pace in 19 months, highlighting the challenges facing the nation in its economic recovery from COVID-19.
Data from the National Bureau of Statistics (NBS) showed that the consumer price index gained 1.7% year-on-year in September, down on the predicted 1.8% rise and August’s 2.4% growth. The index gained 0.2% month-on-month, against the forecast 0.3% rise and August’s 0.4% gain.
Meanwhile, the producer price index fell 2.1% year-on-year, more than the forecast 1.8% fall and the 2% fall reported in August.
The data also showed that core inflation minus volatile food and energy prices stood at 0.5% year-on-year in September, unchanged from August and gross domestic product grew 3.2% year-on-year in the second quarter.
The data follows Tuesday’s mixed trade data, showing that exports were up 9.9% year-on-year, up from August’s 9.5%, imports were up 13.2% year-on-year, higher than August’s 2.1% slump, and a trade surplus of $37 billion, down from August’s $58.93 billion surplus and missing the $58 billion surplus predicted in forecasts prepared by Investing.com.
The Caixin Services Purchasing Managers Index (PMI), released during the previous week, rose to 54.8 in September.
The world’s second largest economy continues to recover from a grim first quarter which saw country-wide lockdowns to curb the spread of COVID-19, as September saw a faster-than-expected growth in factory activity. However, the rise in consumer prices was the slowest since February 2019.
Producer prices also saw a slowdown which could renew deflation concerns and lead to the government unrolling more aggressive stimulus measures, some investors warn. Producer prices are uses to measure industrial demand, which drives investment and profit.
Premier Li Keqiang also warned on Monday that China needs to make continuous efforts to achieve the country’s full-year economic goals.