2020.08.1005:40:00UTC+00China's Inflation Accelerates; PPI Falls At Slower Pace

China's consumer price inflation accelerated in July on higher food costs as regional flooding disrupted transportation, and the decline in factory gate prices slowed further reflecting the recovery in economic activity, official data showed Monday.

Inflation rose to 2.7 percent in July from 2.5 percent in June, the National Bureau of Statistics reported. The rate was marginally above economists' forecast of 2.6 percent.

Food prices advanced 13.2 percent annually as pork prices surged 85.7 percent amid supply disruptions. Food price inflation increased from 11.1 percent in June.

Meanwhile, non-food prices remained flat versus June's 0.3 percent rise.

Core inflation, which excludes food and energy prices, slowed to 0.5 percent from 0.9 percent in June.

On a monthly basis, consumer prices climbed 0.6 percent, offsetting a 0.1 percent drop in June. Economists had forecast a monthly increase of 0.4 percent.

Amid higher commodity prices, producer prices declined at a slower pace of 2.4 percent annually in July, after posting a 3 percent decrease in June, another report from NBS showed. Prices were expected to fall 2.5 percent.

Month-on-month, producer prices were down 2.4 percent in July.

Julian Evans-Pritchard, an economist at Capital Economics, said factory gate deflation continued to ease in July, reflecting the ongoing recovery in economic activity.