China inflation unexpectedly slows to 0.2%

(Sharecast News) - Chinese inflation unexpectedly slowed in June, according to figures from the National Bureau of Statistics on Wednesday, adding to concerns that consumer demand is keeping a lid on the economic recovery. The consumer price index increased at a year-on-year rate of just 0.2% last month, after holding steady at 0.3% for the preceding two months. The consensus forecast was for a slight acceleration in price growth to 0.4%.

Headline prices have been rising at an annual rate since February after several months of deflation.

June's core CPI, which excludes more volatile items like food and energy prices, was unchanged from May showing a year-on-year increase of 0.6%.

Meanwhile, producer prices fell at a year-on-year rate of 0.8% in June, in line with estimates, with the annual decline in costs for goods at the factory gate easing from -1.4% in May.

However, this was still the 21st month in a row of producer price deflation.