Global Market: China Inflation Rises in August, but Weak Demand Remains a Concern
- On Wednesday, China's National Bureau of Statistics reported factory-gate inflation reached 3.8% in August, exceeding the 3.6% forecast, while consumer prices rose 0.8% from a year ago.
- Dong Lijuan, chief statistician at the NBS, attributed the inflation rebound to volatile global commodity prices and seasonal food costs, as supply risks tied to the Middle East conflict kept energy prices elevated.
- Core CPI climbed 1% in August, edging up from July's 0.9% gain, while month-on-month prices increased 0.4%; separately, youth unemployment in urban areas reached 17.9% in July, the worst reading since August 2025.
- Earlier this week, Danske Bank trimmed its 2026 GDP growth forecast for China to 4.6% from 4.8%, citing disappointing consumer data as chief China economist Allan von Mehren warned of a negative feedback loop.
- Household confidence and private consumption growth will remain constrained until the housing market stabilizes. "Until we see a moderate recovery in the housing market, we expect household confidence to remain low and private consumption growth weak," Danske Bank stated.
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The Economic Times
Times of IndiaGlobal Market: China inflation rises in August, but weak demand remains a concern
Chinas consumer inflation accelerated to 0.8% in August, while producer prices rose 3.8%, both slightly above July levels. Despite the improvement, subdued domestic demand remains a major concern, with consumer prices below Beijings 2% target for years. Strong exports, technology industries and AI-related demand continue supporting economic growth.
China's inflation rebounded slightly in August, widening the gap compared to the previous month. However, the prevailing analysis is that it is difficult to view this as a signal of a domestic demand recovery. This is because the impact was largely driven by rising global raw material prices and increased demand in high-tech industries, while household consumption remains sluggish. Chinese policymakers are stepping up efforts to revitalize domes…
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