(Finance) – Inflation accelerates in China in Aprilsignaling a slight recovery in domestic demand, but the growth in consumer prices clashes with producer prices which continue to fall and which signal a general weakness of the Chinese economy, especially considering that the real estate sector continues to suffer.
The data of consumer prices of April reported a increase of 0.3% compared to the previous year and marks a slight acceleration compared to +0.1% in March, also being slightly higher than consensus (+0.2%). On the other hand, an increase of 0.1% was recorded on a monthly basis after -1% in March and against the expected -0.1%.
Core inflationwhich excludes food and fuel prices, grew by 0.7% in April and still marks a slight acceleration compared to +0.6% in March.
The producer price indexon the contrary, continues to decrease and recorded a decline of 2.5% in April compared to the previous year, compared with the 2.8% decline recorded the previous month and extending the negative streak that has been in place for a year and a half.
The Chinese central bank said last Friday that it will make monetary policy more flexible, precise and effective, with the aim of promoting a moderate recovery in consumer prices and consolidating the economic recovery. For this reason it will use all the tools of banks’ capital reserves and interest rates to support growth, since reaching the 5% growth target this year is by no means assured without a government support policy.