Data from the National Bureau of Statistics in China, released this morning, revealed that the annual consumer price index grew below market expectations during the month of May. Whereas, the consumer price index recorded a growth of 1.3%, against expectations of a growth of 1.6%. But it is better than the previous reading, which showed that the index grew by only 0.9% during the month of April.
The annual consumer price index is a leading indicator of inflation and changes in purchasing trends. It is noteworthy that the sustained rise in consumer prices indicates that inflation has become an influential factor in disrupting economic growth. This is likely to stimulate the People’s Bank of China to adopt a tight monetary policy and a policy of financial risk.
The results of this indicator are a summary of the results extracted from the urban and rural consumer price index. In this regard, it should be noted that the purchasing power of the CNY is declining as a result of inflationary pressures.
