China’s Factory Inflation Surges to 9% in July

Source: National Bureau of Statistics

China’s factory inflation accelerated faster than expected in July, with firms already fighting to keep up with increasing raw material prices.

• Factory inflation surged 9.0% year-on-year, higher than the market consensus of 8.8%.
• The acceleration was driven by higher prices of oil and coal. 
• The People’s Bank of China downplayed the surge as “most likely temporary” with the country’s recovery “not yet solid.”
• Consumer prices gained 1.0% year-on-year, faster than the 0.8% expected, but slower than the 1.1% climb in June.
• Food prices fell 3.7% year-on-year, as pork prices plunged by 43.5%.