MNI BRIEF: China July CPI Dips To Over Two-year Low

China's Consumer Price Index fell by 0.3% y/y in July, turning negative for the first time since February 2021, compared with the -0.4% market consensus and down from June's 0.0% print, data from the National Bureau of Statistics showed Wednesday.

Food costs fell 1.7% y/y in July, reversing June’s 2.3% result, with pork, vegetable and poultry prices mainly falling. Pork prices, the main CPI driver, declined further by 26% y/y, compared to a 7.2% fall in June. Service prices rose by 0.8%, an increase of 0.7 percentage points over the previous month, the NBS said. On a monthly basis, CPI rose 0.2% m/m compared to June's 0.2% decline.

The producer price index declined 4.4% y/y, narrowing from June’s 5.4% drop, though underperforming the consensus of a 4.0% decline, according to the NBS. The improvement was mainly attributed to a sufficient supply of domestic coal and steel, increased demand and higher prices of crude oil and non-ferrous metals in the international market, the NBS said. PPI decreased 0.2% m/m, compared with June’s 0.8% decline.