China CPI inflation picks up in April, PPI lags

Investing.com-- Chinese consumer price index inflation grew for a third straight month in April, as continued policy support from Beijing appeared to be boosting consumer demand, although producer price index inflation continued to decline. 

CPI inflation grew 0.3% year-on-year, more than expectations of 0.1%, data from the National Bureau of Statistics showed over the weekend. The reading also improved from the 0.1% rise seen in March.

The month-on-month CPI inflation rate also improved to 0.1% in April from a decline of 1% in the prior month.

The reading comes just days after substantially stronger-than-expected Chinese imports data, which indicated that local demand was picking up amid continued policy support and stimulus measures. 

The data also signals some improvement in the Chinese economy, which has been struggling with deflation for the better part of a year. 

But PPI inflation remained a point of weakness, falling 2.5% in April- more than expectations of 2.3%. The reading improved slightly from a drop of 2.8% in the prior month. 

Factory gate inflation shrank for a 19th consecutive month, as overall Chinese business activity still remained under pressure. Weak overseas demand, sluggish local spending and a sustained property market slump had battered Chinese businesses over the past three years, with the trend showing little signs of easing.

Beijing has rolled out a string of supportive measures for Chinese businesses over the past year. But just how much more policy support it can provide remains in doubt, especially amid high levels of government debt in the country.