China’s CPI rises for fifth consecutive month

China’s consumer inflation remained tepid last month, with factory-gate prices continuing to fall, indicating a lackluster demand despite Beijing’s efforts to boost consumption.

The National Bureau of Statistics reported that the consumer-price index rose for a fifth consecutive month in June, slightly up 0.2% from a year earlier. Factory-gate prices remained in deflation but narrowed their decline from May, with the producer-price index falling 0.8% in June from a year earlier, marking a 21st straight month of contraction.

Economists expect inflation to remain low throughout the year as a property slump continues to dent consumer confidence and spending. Beijing’s manufacturing drive also risks pushing prices down further.

The risk of deflation hasn’t faded, and domestic demand remains weak. Neither fiscal nor monetary policy are expansionary, as real interest rates are high and fiscal spending is soft.

China has leaned on exports as a key growth driver in the first half of the year, but will need domestic demand to recover to drive the economy in the longer term.

If the Federal Reserve starts cutting rates in September, that could give the Chinese central bank some room for interest-rate cuts to help boost the economy. Core consumer inflation rose 0.6% in June, matching the expansion seen in the prior month.

The consumer-price index rose for a fifth consecutive month in June, edging up 0.2% from a year earlier, the National Bureau of Statistics said Wednesday. That missed the 0.4% rise expected by economists in a Wall Street Journal poll and compared with May’s 0.3% increase.

Wednesday’s figures came as no surprise for many economists, who expect inflation to stay low throughout the year as a drawn-out property slump continues to dent consumer confidence and spending. Beijing’s manufacturing drive also risks pushing pr ices down further, economists say.