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Inflation stays at surprisingly low levels in China, close to zero, deflation likely

TOPICS:
china inflacion

Posted By: The Corner 10th June 2023

Bankinter : CPI +0.2% in May (year-on-year) vs. +0.2% estimated and +0.1% previous; Producer Price Index -4.6% in May (year-on-year) vs -4.3% estimated and -3.6% previous.

Assessment: Inflation remains at surprisingly low levels in China, close to zero, and with some probability of entering deflation in view of producer prices. Sufficient arguments for the PBOC to lower interest rates (currently at 4.30% 5A and 3.65% 1A), which would also encourage the post-COVID economic recovery.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.