China on brink of consumer deflation, factory prices dropping

The consumer price index was flat year on year and declined 0.2 per cent compared with the previous month, while factory gate prices fell at the fastest pace since 2016 as demand for consumer and manufactured products softened

The producer price index declined 5.4 per cent compared with the same period a year ago, accelerating from a drop of 4.6 per cent in May and faster than the 5 per cent fall forecast by analysts polled by Reuters. Goldman Sachs analysts said the decline was partly due to weaker commodity prices and continued price cuts due to China’s mid-year “618” online shopping festival.