On the other hand, inflation in China is already extremely low and a sign that the world’s second largest economy is struggling to generate demand, momentum and sufficient growth.
Charlie Bilello, chief market analyst at Creative Planning, on Wednesday tweeted a list of 34 countries’ annual consumer price inflation rates. China’s 0.7%, the lowest since September 2021, was comfortably the weakest of them all, by almost two full percentage points.
Economists polled by Reuters expect that 0.7% rate to fall to 0.4%, which would be the lowest in more than two years.
Producer price inflation figures will also be released on Thursday. The consensus in a Reuters poll is for another slump in the annual rate, to -3.2% in April, the heaviest rate of deflation in almost three years.
The April purchasing managers index reports showed that the input and output price sub-indexes slipped into contraction territory in the month, while April’s trade figures on Wednesday were alarmingly weak too.
The notable slowdown in exports raises questions about the sustainability of China’s export rebound, while the unexpected collapse in imports raises even bigger doubts about domestic demand.
Chinese stocks on Wednesday lost over 1% for the second straight day. Further evidence that the post-lockdown recovery is faltering could make it three in a row on Thursday.
