Underlying Inflation Trends Have Moderated
Chinese factory gate prices have moderated with Jun 21 PPI inflation in line with market expectations at 8.8% yoy, a 0.2ppt fall compared with last month. CPI inflation came in slightly below expectations at 1.1% yoy, compared with market expectations of 1.3% yoy, pointing to a limited cost pass-through to consumers from the high industrial prices. However, persistently high inflationary pressures in raw materials costs will continue to undermine Beijing’s post-pandemic recovery.