China’s headline CPI fell to 2%/yr in May - TDS

Research Team at TDS, notes that China’s headline CPI fell to 2%/yr in May after holding at 2.3%/yr for the past three months, coming in below expectations for a 2.2%/yr gain. 

Key Quotes

“The drop in vegetable prices saw food inflation recede from 7.6%/yr in March to 5.9%/yr. Non food inflation was steady at 1.1%/yr. In contrast, producer price deflation is receding, -2.8%/yr, from –3.4%/yr prior and expectations for  -3.2%/yr, the 3rd straight month that producer prices have risen. If this run higher in producer prices continues, then deflation is unlikely to be as much of a headache for policymakers down the track.”