China inflation slows to 2.1% in May: govt
China's inflation eased to 2.1% year-on-year in May from 2.4% in April, official data showed Sunday, with analysts citing a steep fall in vegetable prices as the biggest factor leading the decline.world Updated: Jun 09, 2013 10:24 IST
China's inflation eased to 2.1% year-on-year in May from 2.4% in April, official data showed Sunday, with analysts citing a steep fall in vegetable prices as the biggest factor leading the decline.
The consumer price index -- a main gauge of inflation -- decreased 0.6% month-on-month last month, compared with a gain of 0.2% in the previous month, the National Bureau of Statistics (NBS) said in a statement.
The year-on-year figure for May compared with a forecast of a 2.5% increase in a median forecast of more than a dozen economists surveyed by Dow Jones Newswires.
A drop of 13.8% month-on-month in vegetable prices during May was the single biggest factor leading the decline, Yu Qiumei, a senior analyst at the NBS, said in a statement.
China, the world's second-largest economy, has set its inflation target for this year at 3.5%, higher than the actual inflation rate 2.6% last year. Inflation hit a 10-month high of 3.2% in February.
Producer prices -- which measure the costs of goods as they leave factories, and are seen as a leading indicator of price trends -- fell 2.9% compared with a drop of 2.6% in April, the NBS said.
Analysts had expected China's economy, which grew at its slowest pace in 13 years in 2012, to experience a pick-up this year, though figures so far have been disappointing.
On Saturday, China reported a sharp slowdown in exports in May from April, while imports unexpectedly dropped, amid weakness in the domestic economy and sluggish demand overseas.
In April, the government announced a surprisingly weak growth in gross domestic product (GDP) of 7.7% for the first quarter. That figure largely surprised analysts who had expected that growth was likely to accelerate in 2013 after showing strength at the end of last year.
Besides, the trade data for May, other recent indicators have raised alarm bells. A survey by British banking giant HSBC showed China's manufacturing activity measured 49.2 in May, an eight-month low.
The government's own survey of manufacturing activity for May, however, was more optimistic, unexpectedly rebounding to 50.8 from 50.6 the month before, according to the NBS.
The private and government purchasing managers' index (PMI) surveys of manufacturing are widely watched indicators of the health of the Chinese economy. Readings above 50 indicate expansion while anything below points to contraction.