China’s August CPI growth slows to 2.6%, producer price index still negative

BEIJING – China’s consumer price index rose 2.6% in August, down from 2.7% in July, while the producer price index, another indicator measuring inflation at the wholesale level, remained in negative at -1.6%, compared with -2.3% in the previous month, according to data from the National Statistics Bureau. PPI inflation showed a significant rebound, but remained negative for the 18th consecutive month, suggesting that demand remains sluggish. The increase in CPI is partially due to adverse weather conditions this summer which drove up food prices, including floods and severe drought. However, the CPI still remains well below the Government’s ceiling of 3.5%, leaving room for Beijing to consider flexible pro-growth measures.