China's producer price index rose 3.5% year-on-year in July, marking the weakest annual gain in three months and falling short of the 3.8% increase economists had forecast. The slowdown from June's 4.1% rise was accompanied by a 0.7% month-on-month decline in factory-gate prices, the second consecutive monthly drop.
Consumer inflation also cooled, with the consumer price index climbing just 0.5% year-on-year, below the 0.8% analysts expected and down from June's 1.0%. The deceleration reflected weaker energy prices and soft domestic demand, with month-on-month consumer prices edging down 0.1%.
The data, published by the National Bureau of Statistics, pointed to continued price pressures in the world's second-largest economy. Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the figures were consistent with other recent economic indicators.