Producers’ prices in China see the worst fall in almost two years

In June, the prices for Chinese manufacturers decreased by 3.6% compared to the year earlier, which noted its largest decline in almost two years, since the deepening of the price war in the economy, which is already fighting the weakening of consumer demand.

The consumer price index increased by 0.1% higher in June, according to the National Statistics Bureau on Wednesday, showing early signs of recovery after four consecutive decline.

According to the Reuters poll, economists predicted a single reading compared to the same period earlier.

According to LSEG, deflation at the manufacturers has deteriorated than the expected drop of 3.2% decrease in Reuters, which marks the biggest fall since July 2023. Since September 2022, the IPP has been deepened in a long -term deflation series.

“Without strongly stimulating policy, it is difficult to avoid the current deflation spiral,” said Larry Hu, Chinese economist Macquarie, adding that the impulse in China’s export has partially sent Beijing’s desire to stimulate consumption in any significant way.

“Politicians will continue to wait for the exports to fall sharply,” Hu added.

Last week, Chinese politicians at the leading economic policy meeting, chaired by President Xi Jinping, criticized the excessive price competition of Chinese companies to attract consumers, as the US tariff pressure threatened the viability of the world’s largest market.

Beijing promised delay the rules by such an aggressive price decline This failed to influence consumer behavior by biting the profitability of enterprises.

“Enterprises should be guided by improving the quality of products and maintaining stagnant from outdated production facilities,” ” The Chinese state -owned newspaper saidreferring to the meeting.

Profit in industrial firms plunged by 9.1% in May A year earlier, noting the steep fall since October last year.

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