China Falls Back Into Deflation; PPI Continues To Decline

(RTTNews) - China's consumer prices declined more than expected in August on weaker demand and producer prices continued to fall, strengthening calls for more actions to bolster domestic consumption amid slowing exports growth.

The consumer price index dropped 0.4 percent from a year ago after remaining flat in July, the National Bureau of Statistics reported Wednesday. Prices were expected to fall 0.2 percent.

By contrast, core inflation that excludes prices of food and energy, rose to 0.9 percent in August, the fastest in more than two years, from 0.8 percent in July.

The NBS said the overall fall in consumer prices reflects high base of comparison and sharper fall in food prices. The decline in food prices deepened to 4.3 percent from 1.6 percent.

On a monthly basis, the CPI remained flat in August, while prices were forecast to edge up 0.1 percent.

In a separate communiqué, the NBS showed that producer price inflation has remained negative for nearly three years highlighting persistent deflationary trend.

Nonetheless, producer prices dropped at a slower pace of 2.9 percent from a year ago in August, following a 3.6 percent decrease in July. The annual fall came in line with expectations.