MNI 5 THINGS: China CPI and PPI Seen Accelerating In June

By Iris Ouyang

     BEIJING (MNI) - China's National Bureau of Statistics is set to release

consumer price index (CPI) and producer price index (PPI) data for June on

Tuesday. MNI highlights five things for particular attention:

     - CPI growth is expected to have accelerated marginally to 1.9% in June

from 1.8% in May, according to an MNI survey of 19 economists. The pick-up in

headline CPI growth is predicted to be driven entirely by rising non-food

prices, which are expected to more than offset moderating food price inflation.

     - On a month-on-month basis, the CPI is anticipated to moderate further in

June, following May's 0.2% decline. This reflects a recent downward trend in the

prices of fruit and vegetables, driven by copious summer supplies of these

products. Pork prices, however, are expected to rebound in June, having dragged

on CPI growth earlier in the year.

     - With both infrastructure investment and property investment growth

moderating, prices of products related to these two sectors -- such as cement,

glass and home appliances -- are facing downward pressure.

     - Survey respondents look for China's annual PPI inflation rate to rise to

4.5% from 4.1% in May. Still-elevated prices for industrial products are likely

to be a key contributing factor.

     - Month-on-month PPI growth, meanwhile, is anticipated to decelerate a

touch in June, following a 0.4%m/m May reading. Higher prices for coal, steel

ore and non-ferrous metals are expected to slightly outweigh price drops for

some goods, including gasoline and chemical products.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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