The price index for the last month of last year thus exceeded the 1.6% of November, although it remains below 2%, a sign that the economy is still facing the effects of its zero Covid-19 policy, according to the AFP news agency.
While, inflation for all of 2022 reached 2%, at a time when other large economies face sharp price increases due to the rising cost of energy and food and problems in supply chains.
Beijing had set an inflation target of 3% for 2022, and the fact that it was below that level gives the Chinese authorities room to apply stimuli to the economy.
The world’s second-biggest economy is still bearing the effects of years of applying the zero-coronavirus policy, which has hit businesses and supply chains as well as consumption, despite the fact that most restrictions have already been lifted.
On the other hand, the producer price index, which measures the cost of goods leaving the factory, contracted to 0.7% in December for the third consecutive month.
“The economy is still operating below its potential,” Zhiwei Zhang of Pinpoint Asset Management wrote in a note.
China is scheduled to release its economic growth figures for 2022 next Tuesday, while Beijing has set an annual economic growth target of 5.5%.
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