China June Inflation Rose 2.7Pct on Year; PPI Fell 2.7Pct07-09 10:49 Caijing
China's inflation accelerated more than estimated in June due to the impact of the rise in price level in the same month a year ago, while the decline in factory-gate prices extended a losing streak amid slowing economic growth.
The consumer price index rose 2.7 percent from a year earlier, compared with a year-on-year increase of 2.1 percent in May, the National Bureau of Statistics announced Tuesday.
Food prices climbed by 4.9 percent after a 3.2 percent gain in May, remaining the largest contributor to the headline inflation.
The producer price index, meanwhile, which gauges inflation at whole-sale level, fell by 2.7 percent from a year ago, and 0.6 percent from the previous month, the NBS said.
June's inflation figure has beaten estimates in a Bloomberg survey of economists, whose median was 2.5 percent. Economists polled by Reuters had expected consumer inflation of 2.5 percent and factory-gate prices to fall 2.7 percent in June.
Commenting on June's headline inflation, Yu Qiuyu, a senior statistician with the NBS, attributed June's acceleration in inflation to a larger base effect.
"Tail-raising factor contributed 1.9 percent to June's y-o-y inflation, 0.6 percentage points higher than that in May," Yu said in a statement accompanied with the release of CPI data, "The increase in the tail-raising factor was related to a sequential fall in prices in last June," which were down 0.6 percent from that in May, and was factored into this year's inflation.
Inflation in the first half of this year was up 2.4 percent from the same period a year ago, according to the NBS.
The lowest first-half inflation since the financial crisis 2009 and prolonged factory-gate deflation underscore difficulties China is facing to maintain a targeted growth rate of 7.5 percent.
Citigroup cut China's GDP growth to 7.4 percent from 7.6 percent in 2013, and to 7.1 percent from 7.3 percent in 2014, following similar moves by other investment banks like Morgan Stanley, UBS and Barclays.
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