People buy Spring Festival decorations at a market in Zixing city, central China’s Hunan province, Feb. 4, 2024.
CFOTO | Future publications | fake images
China’s producer prices fell for the 16th month in January, while consumer prices fell for the fourth month. The data underscores the depth of the challenge Beijing faces in reviving the world’s second-largest economy.
China’s producer price index fell 2.5% in January from a year earlier, the National Bureau of Statistics reported Thursday, slightly better than expectations for a 2.6% drop, after a 2.5% drop. .7% in December.
The country’s consumer price index fell 0.8% annually in January, more than the median estimate of a 0.5% drop in a Reuters poll. The CPI fell 0.3% in December. However, on a monthly basis, the CPI rose 0.3% in January compared to December, slightly below median expectations of 0.4% growth.
The NBS said the January inflation data was influenced by the high base effect of the Spring Festival or Lunar New Year, which fell in January a year ago. The festival falls in February this year.
The core CPI, which excludes energy and food prices, rose 0.4% in January from a year earlier, the bureau said in a separate statement. On a monthly basis, this translated into growth of 0.3% in January compared to December, the NBS said.
Thursday’s inflation data highlights lingering fears that China is on the brink of deflation. The tepid prices highlight what China’s top leaders called a “tortuous” economic recovery after the country emerged from its draconian zero-Covid restrictions towards the end of 2022.
China is a clear outlier among the world’s major economies, which mostly struggle with persistently high inflation. The latest official and private surveys of manufacturing activity showed that growing competition in the market has limited the bargaining power of Chinese companies, depressing production prices.
Consumer confidence and broader growth in the Chinese economy have been severely hit by a housing market slump after Beijing cracked down on property developers’ high reliance on debt for growth in 2020.
This is a developing story. Please check back for more updates.