China unexpectedly recorded zero inflation in June

According to the report of the State Statistical Office of the People's Republic of China, in June consumer prices (CPI index) did not change compared to last year. In May, inflation was 0.2%, and analysts expected this level to remain. This is the lowest level of price growth since February 2021, when the country faced deflation.

Food prices in China increased by 2.3% due to an increase in the cost of fresh vegetables and eggs. Prices for non-food products decreased by 0.6%. Transport services fell by 6.5%, housing prices remained unchanged, and medical and educational services rose by 1.1% and 1.5%, respectively.

The CPI index excluding food and energy slowed to 0.4% in June from 0.6% in May, reaching the lowest since March 2021. Compared to the previous month, core inflation fell by 0.2% in June, which was the fifth consecutive monthly decline.

On the other hand, production prices (PPI index) in China decreased by 5.4% YoY last month (-4.6% in May). This is the highest level of decline since December 2015, and it has been observed for nine months in a row due to weakening demand and slowing growth in commodity prices.

On a monthly basis, the value of the PPI index in June decreased by 0.8% compared to May.