China's consumer inflation tame in July, but producer deflation stubborn
Rate remains steady at 2.3pc but producer deflation proves stubborn
The mainland posted mild consumer inflation yesterday, well below the annual target in July, giving authorities room to further relax monetary policy.
But deflationary pressure for producers remained stubborn, highlighting a wobbly economic rebound.
Data from the National Bureau of Statistics showed that the consumer price index held steady at 2.3 per cent year-on-year in July, while the producer price index fell 0.9 per cent for the 29th consecutive month.
Analysts attributed the steady CPI to slides in prices for fresh fruit and vegetables, which offset rises in other categories.
"In general, China's inflation outlook remains mild; however, the deflation risks may even rise in the foreseeable future if the growth momentum weakens again," ANZ economists Liu Li-Gang and Zhou Hao said in a research note.
"Against this backdrop, the central bank should maintain an accommodative bias in the monetary policy stance."