China 's producer prices sink further, recuperation still possible

June had seen China s factory gate prices falling for five consecutive months. This could be attributed to the novel coronavirus crisis dragging industrial demand. However, improvements monitored in some parts of the sector indicate a gradual economic recovery.

The producer price index (PPI) recorded a 3.0% decline in June from a year earlier, China s National Bureau of Statistics (NBS) said in a statement on Thursday. The reading came milder than the 3.2% drop predicted by analysts and lower than the 3.7% decline recorded in May.

However, the index jumped 0.4% from a month ago as signs of improvement were seen in the manufacturing sector. More so, it recovered from a 0.4% decline in May.

 The change was driven by an across-the-board increase in raw materials, manufactured goods, and consumer goods price inflation,  said Martin Rasmussen, China Economist at Capital Economics.

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