China’s May CPI Saw 2.5% Increase

China’s May consumer price index (CPI)  reached a 2.5% increase year-on-year, which was higher than last month’s 1.8% and was in line with expectations, according to data released by the National Bureau of Statistics.

The increase in the main inflation gauge reflects an easing threat of deflation.

The producer price index (PPI) was 1.4% lower than 2013’s figure, a smaller decline than April’s 2.0%, which was consistent with signs of modestly stronger demand growth.

“The rise in CPI and PPI inflation has limited policy implications in the near term as the rise in food prices, especially pork, have stabilized in recent days and PPI inflation is still significantly negative on a year-on-year basis,” says a research report by Gao Hua Economics Research.