The NBS reports consumer prices rose 1.9 % y-o-y in June. Inflation has slowed slightly during the past few months. Most price movements have come from food prices (e.g. meat prices are up about 20 % y o-y in June), while the core inflation (inflation excluding prices of food and energy) has remained rather stable at around 1.6 % since the first half of 2015. Producer prices, in contrast, have witnessed a slight abating of the deflationary spiral that began in 2012. Given that inflation is well below the official government 3.5 % target, certain circles have suggested that now is the time for monetary easing. For monetary policy-setters, however, the challenge is balancing inflation-fighting gains against the many other goals of Chinese monetary policy.
Price trends in China Sources: China National Bureau of Statistics and Macrobond
