China’s factory inflation hits 17-month low as pressures ease

BEIJING (Reuters) — China’s factory-gate inflation eased to a 17-month low in July, defying global cost pressures as slower domestic construction weighed on raw material demand, although consumer prices picked up pace, driven mostly by tight pork supplies.

The producer price index (PPI) rose 4.2 percent year-on-year, the National Bureau of Statistics (NBS) said on Wednesday, after a 6.1 percent uptick in June and missing analyst forecasts for a 4.8 percent increase.

China’s producer price growth has slowed from a 26-year high hit in October last year, giving policymakers some leeway to stimulate the flagging economy even as central banks elsewhere scramble to hose down rampant inflation with aggressive interest rate hikes.