By Gina Lee
Investing.com – Factory exit inflation in China hit a 13-year high in August. Soaring commodity prices helped the gains while putting additional pressure on Chinese manufacturers.
Data from the National Bureau of Statistics (NBS) released earlier today showed the producer price index rose 9.5% year-on-year. The rate was faster than the 9% growth reported in the previous month, which was also the forecast figure prepared by Investing.com. It is also the fastest growth rate since August 2008.
Recent outbreaks of COVID-19, high commodity prices, tightening real estate restrictions and a campaign to cut carbon emissions have all contributed to the slowing of China’s economic recovery from COVID-19.
The coal, chemicals and metals industries were behind much of the rise in commodity prices in August, NBS official Dong Lijuan said in a statement released alongside the data. .
At the same time, data from the NSB also shows that the Consumer Price Index (CPI) rose 0.1% month-on-month, lower than the 0.5% growth in the forecast prepared by Investing.com. and the 0.3% growth reported the previous month.
The CPI rose 0.8% year-on-year, lower than the 1% growth recorded the previous month and in the forecast prepared by Investing.com.
Consumption has been hit by tighter restrictive measures, including travel limits, to curb the latest COVID-19 outbreak. Lower airfares, travel and hotel rooms thanks to these measures have slowed consumer inflation on a monthly basis, NBS’s Dong said.
The People’s Bank of China is now expected to further reduce the amount of liquidity banks must hold as reserves later in 2021. It has already reduced the amount in July 2021, a move that freed up around CNY1 trillion (154.72 billions of dollars) of long-term liquidity. in the economy.
“We expect monetary policy to remain cautious with a slightly relaxed bias for the remainder of the year,” HSBC chief economist for Greater China Jing Liu said in a note.
Consumer price inflation in China, which is expected to remain subdued, will not prevent a slight easing of the position, the note adds.
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