BEIJING, May 12 (Xinhua) -- China's producer prices continued to fall in April as the novel coronavirus outbreak and a persistent slump in global commodities prices combined to drive deflationary pressure, official data showed Tuesday.
The producer price index (PPI), which measures costs for goods at the factory gate, fell 3.1 percent year on year in April, according to the National Bureau of Statistics.
The reading deepened from the 1.5-percent drop in March, with price declines widening in major industries.
Aside from the epidemic's negative impact on demand, the rout in the global oil market and retreating commodities prices, which delivered big shocks to the industrial chain, were other key drivers for the price deflation.
Prices for oil and natural gas extraction saw the biggest drop last month, plunging 51.4 percent year on year, while those for the processing of oil, coal and other fuel went down 19.8 percent.
Month on month, overall producer prices fell 1.3 percent.
The PPI data came along with the release of the consumer price index (CPI), which showed consumer inflation easing to 3.3 percent in April on retreating food prices as the country fast-tracks the restoration of economic activities amid further epidemic containment.
Wen Bin, chief analyst at China Minsheng Bank, expects the CPI will continue to retreat in the coming months to allow policymakers more leeway to stimulate the real economy as the focus should be tilted toward growth and employment.
Meanwhile, further efforts should be made to spur recovery on the demand side and boost business confidence as producer prices hinge on both domestic and external factors, he said.
"There is still room and necessity to further cut banks' reserve requirement ratios and interest rates," Wen noted.
Latest comments