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China’s factory gate deflation accelerated to its fastest clip since 2016 in June, a further sign of faltering economic momentum in the country.

The producer price index declined 5.4 per cent compared to the same period a year ago, accelerating from a drop of 4.6 per cent in May and faster than the 5 per cent fall forecast by analysts polled by Reuters. Consumer prices were flat year-on-year but declined 0.2 per cent compared to the previous month.

Factory gate prices refer to the cost at which wholesalers buy materials from producers, excluding some fees.

China’s stalling recovery has led to calls for economic stimulus, but Beijing’s efforts have been limited to a June cut in deposit rates.