China’s CPI inflation likely to have slowed again in June on weaker food price growth

China’s headline CPI inflation is likely to have decelerated again in June due to weaker food price growth. According to a Societe Generale research report, the nation’s CPI inflation is expected to have slowed to 1.8 percent year-on-year.

Whole prices of agricultural products fell for the fourth straight month by additional 2.9 percent month-on-month, indicating towards a 1 percent decline in the CPI food index. In the mean time, non-food components are expected to have stayed quite stable, said Societe Generale.

According to the official manufacturing PMI report, the input price index fell for the second consecutive month in June to 51.3 from May’s 55.3. But this continues to show a sequential growth in the producer price index. Therefore, along with a favorable base effect, the year-on-year contraction is expected to keep narrowing further to -2.3 percent from -2.8 percent, added Societe Generale.