Chinese factory gate inflation deceleration continues

CHINA’S factory inflation eased in October owing to slackening demand and a trade war with the United States, while consumer price inflation held steady, official data showed on Friday.

The producer price index – an important barometer of the industrial sector that measures the cost of goods at the factory gate – decelerated to a 3.3 per cent on-year rise in October.

It ticked downwards for the fourth consecutive month, from a high of 4.7 per cent in June, while remaining in line with the forecast in a Bloomberg News survey.

“China producer’s inflation is cooling as manufacturing activity is receding dampening price pressures on raw commodities, yet another casualty of US-China trade wars,” said Stephen Innes, head of AsiaPacific trade at OANDA, a foreign exchange trading platform.

“The decline in the PPI underscores increased economic pressures.”

Analysts forecast price increases would remain subdued in the months ahead even as Beijing lets up on its campaign to battle winter pollution.

Meanwhile, pricey fruit, vegetables and oil once again held up China’s inflation rate in October.

The consumer price index rose 2.5 per cent, the National Bureau of Statistics said.

The price jump, similar to September’s, was in line with economist forecasts and comes in below Beijing’s targeted ceiling of three per cent.