China’s consumer-price gains slowed for a second month while factory-gate deflation continued to narrow.
The consumer-price index rose 1.9 percent in June from a year earlier, compared with a median economist estimate of 1.8 percent and a 2 percent gain in May. The producer-price index fell 2.6 percent, less than the 2.8 percent drop a month earlier.
Subdued inflation, below the central bank’s 3 percent target pace, suggests the People’s Bank of China has additional room to extend monetary stimulus as economic growth slows. Meanwhile, factory-gate deflation pressures have been easing amid a rebound in property sales and higher commodities prices.
"The fear earlier this year about runaway inflation has largely gone," Larry Hu, head of China economics at Macquarie Group Ltd. in Hong Kong, wrote in a note before the data was announced. For the rest of the year, there’s little chance consumer inflation exceeds 2 percent, he said.
— With assistance by Jeff Kearns