Consumer prices in China rise for third consecutive month in April

Chinese economy: Consumer prices in China rose for the third consecutive month in April, signalling sustained domestic demand amidst a tentative economic recovery. The latest data from the National Bureau of Statistics revealed a 0.3 per cent increase in the consumer price index (CPI) compared to the previous year, exceeding expectations from a Reuters poll which anticipated a 0.2 per cent rise. Additionally, CPI edged up by 0.1 per cent from the previous month, reversing a 1 per cent decline observed in March.

While consumer prices showed resilience, producer prices continued their downward trend, with the producer price index (PPI) dropping by 2.5 per cent year-on-year in April. This decline moderated slightly from the previous month's 2.8 per cent slide but was in line with expectations of a 2.3 per cent decrease.

Despite concerns surrounding economic growth, exacerbated by a prolonged housing downturn, the Chinese government remains committed to providing support. The Politburo, a key decision-making body of the ruling Communist Party, affirmed in late April its intention to employ policy tools such as adjusting banks' reserve requirement ratios and interest rates to boost the economy.

Notably, challenges persist in the housing market, with average daily home sales plummeting by 47 per cent during the Labour Day holiday compared to 2023 levels. Furthermore, apprehensions about unemployment, particularly among the youth demographic, continue to linger.

Core inflation, excluding volatile food and fuel prices, saw a modest uptick to 0.7 per cent in April from 0.6 per cent in March, indicating some underlying price pressures.

(With Reuters inputs)