The politically sensitive food inflation jumped to a 7-1/2-year high of 8.3 percent in June from 7.7 percent in May, as prices of pork surged 21.1 percent, the fourth straight month of increase in over two years, after a 18.2 percent gain in May. In addition, prices of fresh fruits soared (42.7 percent vs 26.7 percent); and cost of edible oil rose 0.1 percent, after a flat reading in the prior month. Meanwhile, prices slowed for both eggs (6.2 percent vs 8.7 percent) and fresh vegetables (4.2 percent vs 13.3 percent).
Non-food price inflation fell to 1.4 percent in June from 1.6 percent in May. Prices rose at softer pace for rent, fuel & utilities (1.6 percent vs 1.8 percent); household goods & services (0.8 percent vs 1 percent); and education, culture & recreation (2.4 percent vs 2.6 percent). In addition, cost of transport & communication prices fell 1.9 percent, faster than a 0.9 percent drop in the previous month. On the other hand, inflation was steady for healthcare (at 2.5 percent, the same as in May), while prices rose further for both clothing (1.8 percent vs 1.7 percent); and other goods & services (2.7 percent vs 2.1 percent).
Annual core inflation, which strips out volatile food and energy prices, came in at 1.6 percent in June, unchanged from the previous month's near 3-year low.
On a monthly basis, consumer prices fell 0.1 percent in June, after being flat in May and in line with market forecasts.
Meanwhile, China's producer price index unexpectedly was unchanged from a year earlier in June, after a 0.6 percent gain in the prior month and below market consensus of a 0.3 percent rise. It was the lowest producer inflation since August 2016, when prices declined 0.8 percent. Cost of means of production fell for the first time in four months (-0.3 percent vs 0.6 percent in May), namely raw materials (-2.1 percent vs -0.6 percent), processing (a flat reading vs 0.5 percent) and extraction (4.5 percent vs 6.1 percent). Meantime, consumer goods inflation was steady for the third month in a row (at 0.9 percent), of which food production (at 2.2 percent, the same as May), daily use goods (0.5 percent vs 0.4 percent), clothing (1.6 percent vs 1.5 percent), and durable goods (-0.9 percent vs -0.8 percent). On a monthly basis, producer prices went down 0.3 percent in June, after a 0.2 percent gain in May. Considering the first half of 2019, producer prices rose 0.3 percent.