People buy Spring Festival decorations at a market in Zixing, central China’s Hunan province, on February 4, 2024.
Photo | Future Publishing | Getty Images
China’s producer prices fell for the 16th straight month in January, while consumer prices fell for the fourth straight month. The data underscores the depth of the challenges facing Beijing in rebuilding the world’s second-largest economy.
China’s producer price index fell 2.5% year-on-year in January, the National Bureau of Statistics announced on Thursday, following a 2.7% decline in December and slightly above expectations for a 2.6% decline.
The country’s consumer price index fell by an annualized 0.8% in January, beating the median forecast of a 0.5% decline in a Reuters poll. CPI fell by 0.3% in December. However, on a monthly basis, the CPI rose 0.3% in January compared to December, slightly below the median estimate of a 0.4% rise.
NBS said January’s inflation statistics were affected by the high base effect of the Spring Festival and Lunar New Year, and the inflation rate declined in January last year. The festival will be held in February of this year.
The bureau said in a separate statement that core CPI, which excludes energy and food prices, rose 0.4% in January from a year earlier. According to NBS, on a monthly basis, January grew by 0.3% from December.
Thursday’s article on inflation highlights deep-seated concerns that China is on the brink of deflation. The slump in prices underscores what top Chinese leaders have called a “tortuous” economic recovery after the country emerges from strict zero-coronavirus measures towards the end of 2022.
China is an outlier as most of the world’s major economies struggle with stubbornly high inflation. The latest public-private survey on manufacturing activity reveals that increased market competition is limiting the bargaining power of Chinese companies and driving down production prices.
Consumer confidence and broader growth in China’s economy were hit hard by a downturn in the real estate market after the Chinese government cracked down on developers’ heavy reliance on debt for growth in 2020. There is.
This is a developing story. Check back for more updates.