Producer prices in China They retreated more than the expected in July, while the prices Consumer remained unchanged, underlining the impact of the hypotension domestic demand and persistent uncertainty on commerce in the climate of consumers and businesses.
The wholesale prices that sell the factories in China are reduced for more than two years and Saturday’s (09.08.2025) suggests that efforts at an early stage to tackle price competition have not yet produced significant results.
Deflationary pressures prompted the Chinese authorities to deal with excess production capacity in key sectors. However, the last round of industrial restructuring seems to be a truncated version of sweeping reforms on the side of the offer that began a decade ago and were decisive for ending a deflationary spiral.
The producer price index fell 3.6% annually in July, according to figures from the National Statistics Bureau published on Saturday, lagging out for economists for a decline of 3.3% and identifying with the almost two -year low recorded in June.
Extreme weather events and uncertainties in world trade have contributed to price reductions in some sectors, Dong Litzuan, head of NBS statistician, said in a statement.
However, on a monthly basis, PPI shrunk by 0.2%, improved 0.4% of June.
Despite the data, some analysts see signs of relaxation of deflationary pressures. Singh Zaopeng, a leader for China’s strategic analyst in Anz, pointed out improvements to the monthly PPI and the annual CPI structural.
He expects that the current policy measures “Anti-Involution”-aimed at limiting the anarchic competition in sectors such as cars-will begin to raise the annual PPI from August.
Nevertheless, other analysts remain cautious, noting that without stimulating demand or reforms to improve citizens’ well -being, measures may have a limited impact on final demand. A prolonged recession in the housing market and fragile trade relations with the US also continue to burden consumer expenditure and industrial activity.
China’s consumer price index was unchanged annually in July, compared to a rise in 0.1% in June, according to NBS data, exceeding the Reuters poll for a 0.1% drop.
Structural inflation, which excludes food and fuel prices, was 0.8% in July on a yearly basis, at the highest level of the last 17 months. Food prices fell 1.6%, after a decline of 0.3% in June.
Extreme weather phenomena further burdened the economy, with choking heatwaves affecting much of China’s eastern coastline last month and more intense than usual waterfalls to whip the country, as the Eastern Musol and Muson “Koli”.
On a monthly basis, the CPC increased by 0.4%, compared to 0.1%in June and exceeding 0.3%rise forecasts.
“Nevertheless, it remains unclear if this is the end of deflation in China,” said Jiguei Zang, head of economist at Pinpoint Asset Management.
“The real estate industry has not stabilized. The economy is still more supported by external demand than domestic consumption. The labor market remains weak, “he added.