Economists say rate cuts unlikely to solve China’s deflation woes
CPI grows slightly, but production price index posts largest year-on-year decline since 2023
China’s central bank is likely to cut rates later this year, but this is unlikely to fix the country’s worsening deflation problem, economists tell Central Banking.
China’s statistics bureau released data on July 9 showing that the consumer price index (CPI) in June had risen 0.1% year on year. This was the first such rise in five months, and followed a 0.1% drop in May. However, it was overshadowed by a 3.6% year-on-year decline in the producer price index (PPI) – its largest drop since 2023
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