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Fundamental Forex Analysis

China’s economic recovery isn’t yet strong enough to produce inflation pressures – Bloomberg

Following the releases of the Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) data, Bloomberg analysts are out with their insights on the deepening deflationary pressures in the world’s top consumer.

Key takeaways

“China’s factory deflation deepened in May and consumer price gains slowed, signaling that the recovery isn’t yet strong enough to produce inflation pressures.”

“Core inflation unchanged at 1.1%.”

“PPI deflation will continue due to the severe slump in demand caused by the coronavirus outbreak.”

“CPI will slow in H2.”

“Falling CPI inflation and continued PPI deflation will provide Beijing with more policy space to roll out policy easing/stimulus measures to offset the impact of Covid-19 on the economy.”

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