BEIJING Reuters - China's factory gate prices were faster than expected in May, as faltering demand weighed on manufacturing, hindering the fragile economic recovery, while consumer inflation missed expectations.
The producer price index PPI fell for an eighth consecutive month, down 4.6%, the NBS said in a statement. In a Reuters poll, Economists predicted a fall of 4.3%.
The CPI rose 0.2% from a 0.1% increase in the past month, missing a forecast of a 0.3% rise.
The first quarter of the year saw China's economy grow faster than expected, but recent data showed factory activity fell in May and imports fell.
Some economists expect the People's Bank of China PBOC to cut rates or release more liquidity into the financial system. In March, the bank cut reserve requirements for lenders, resulting in a drop in reserve requirements.
China's biggest banks yesterday said they had lowered interest rates on deposits, giving some relief to the financial industry and the wider economy by easing pressure on profit margins and reducing lending costs.
Investors are downgrading their predictions for economic growth for the year despite signs of slowing. The government has set a modest GDP growth goal of around 5% for this year, despite badly missing the 2022 goal.