CICC: China’s June PPI Growth Accelerates to 4.1% as CPI Falls 0.3% MoM

China’s producer price index (PPI) turned from rising to falling on a month-on-month basis in June, while its year-on-year increase widened to 4.1% from 3.9% in May, helped by a low base a year earlier, China International Capital Corp (CICC) said, according to Jiemian News. CICC attributed the monthly decline mainly to the petrochemical chain, citing the impact of falling international oil prices.

CICC said the consumer price index (CPI) fell 0.3% month-on-month in June and eased to 1.0% year-on-year, as prices for items such as gasoline and gold jewelry retreated, while core inflation also softened slightly. It added that the widening gaps between prices of producer goods and consumer goods, and between PPI and CPI, may indicate continued structural divergence and ongoing pressure on profits in midstream and downstream sectors.

Looking ahead, CICC said that if oil prices do not rise significantly and monthly momentum continues to weaken—alongside a higher base from last year—PPI year-on-year growth could trend lower in the second half. It expects CPI year-on-year growth to remain relatively mild in the third quarter amid weak end demand and a short-term bottoming in pork prices.