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China’s factory gate deflation deepens in May

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BEIJING (Reuters) – China’s factory gate prices fell faster than expected in May, as faltering demand weighed on manufacturing, impeding the fragile economic recovery, and consumer inflation missed expectations, data showed on Friday.

The producer price index (PPI) for May fell for an eighth consecutive month, down 4.6%, the National Bureau of Statistics (NBS) said. Economists in a Reuters poll had predicted a 4.3% fall.

The consumer price index (CPI) rose 0.2% year-on-year after a 0.1% rise in the previous month, missing a forecast for a 0.3% increase.

China’s economy grew faster than expected in the first quarter, but recent data showed factory activity contracted and imports fell in May.

(Reporting by Joe Cash; Editing by Sam Holmes)

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