China’s National Bureau of Statistics said the producer price index rose 6.4 percent year-on-year to 820 percent in March 2021, after rising 8 percent in April, according to a Reuters poll. The consumer price index rose 2.1 percent in May from a year earlier, in line with April growth. In a Reuters poll, the consumer price index was expected to rise 2.2 percent.
Mild price pressures also allow China’s central bank to release more stimulus to support the economy, even as monetary authorities in most countries try to reduce inflation by sharply raising interest rates. “Factory inflation will continue to decline for the rest of the year,” said Xiana Yue, a Chinese economist at Capital Economics. The world’s second-largest economy has slowed significantly in recent months due to tight supply controls, disruption of the supply chain and production and consumption. In late May, China’s cabinet announced a package of 33 measures to revive its economy.
