|
Indeed, stronger price pressures may not do much to allay
concerns about the health of the world's second-largest economy,
where a recent 30 percent slump in its stock market has raised
fears about further threats to China's sluggish economic growth.
Consumer inflation is expected to have picked up but only
marginally to 1.3 percent in June from a year ago, compared with
May's 1.2 percent, the median forecast of 40 analysts polled by
Reuters showed.
Yet the producer price index, which has been pressured by lower
commodity prices and excess capacity at factories, is seen
falling 4.5 percent, compared with a 4.6 percent decline in May.
That would mark its 39th straight month of declines.
"The sequential decline of food prices has continued in June on
seasonality, though at a milder pace, as vegetable prices
narrowed the loss and pork prices posted another solid gain,"
Wang Tao, an economist at UBS, said in a note.
"In contrast, domestic raw material prices stumbled again,
weighed by sluggish domestic production and stuttering global
commodity prices," she said.
With consumer inflation running well below the Chinese
government's 3 percent target for the year, the central bank has
room to loosen monetary policy if needed.
Hurt by a cooling property market and slowing growth in
investment, manufacturing and retail sales, China's economy grew
at its slackest rate in 6 years in the first quarter, expanding
by just 7.0 percent.
Many economists believe it lost further momentum in the spring.
Second-quarter growth data is due on July 15.
To support the economy, the central bank has already lowered
interest rates four times in six months and reduced the amount
of cash that banks must hold as reserves.
Some analysts believe China could lower rates yet again,
alongside further reductions to the reserve requirement ratio to
ensure the economy grows by around 7 percent for the full year,
as targeted by the government.
(Reporting by Koh Gui Qing; Editing by Kim Coghill)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
