China’s Consumer Prices Stuck in Decline, Factory-Gate Deflation Persists

Reuters

12:21 JST, January 12, 2024

BEIJING, Jan 12 (Reuters) – China’s consumer prices extended their decline for a third month in December while factory-gate prices also fell, highlighting persistent deflationary pressures in an economy struggling to mount a solid recovery.

The consumer price index (CPI) shed 0.3% in December from a year earlier, and was up 0.1% month-on-month, data from the National Bureau of Statistics (NBS) showed on Friday. November’s index dropped 0.5% in annual and monthly terms.

Economists polled by Reuters forecast a 0.4% fall in consumer prices year-on-year and a 0.2% gain month-on-month.

The producer price index (PPI) slid 2.7% after a 3% fall in November, marking the 15th straight month of declines. Analysts had expected a 2.6% tumble in December.

With a protracted housing downturn, a soft job market andother headwinds such as debt risks dampening growth prospects, consumers in the world’s second largest economy have been tightening the purse strings.