China Cpi Rises In August

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China Cpi Rises In August

China'S Cpi Rises In August While Ppi Remains Weak

healthy acceleration was seen in the Chinese CPI during August. In fact, the increase in the CPI was one of the fastest in the last 6 months.

According to experts, the uptick in consumer inflation was due to an increase in food costs amid weather disruptions. Meanwhile, the PPI (Producer Price Inflation) continues to show a deflation trend.

Chinese Economy Faces Multiple Headwinds

The recent PPI and CPI show that the 2nd largest economy in the world is in distress. To counter it, the officials continue to roll out new stimulus measures but it seems they are not enough.

Some of the challenges faced by the Chinese economy are high unemployment, housing downtrend, and debt problems. Amidst all of this, China is also facing an increase in trade tensions with the USA.

In August, CPI jumped by 0.6% when compared with last year, while July's reading was +0.5%. However, the forecast for August CPI was 0.7%, which shows that things are not working well for the Chinese economy.

The recent jump in the CPI is due to higher food prices, which is a byproduct of extreme summer weather. From high temperatures to floods, all of that led to higher food prices.

Overall, around 1.46 million hectares of crops were affected in China during August. That's why it is safe to say that the recent uptick in CPI is due to weather.

According to experts, the rebound in the CPI was softer than the forecast and didn't help ease the concerns related to deflation.

look at the core inflation in China shows a 0.3% increase in August. Once that, that's the lowest reading of 3 1/2 years and shows that deflation remains the dominant trend.

After the release of a lower-than-expected CPI reading, the Chinese Yuan turned lower against the US Dollar on Monday. Similarly, the Chinese stocks also turned lower, which points to weak sentiment.

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