China’s consumer prices fell at their fastest pace in three years in November as deflation in factories deepened, signaling rising deflationary pressures amid weak domestic demand that calls into question economic recovery.
The consumer price index (CPI) fell 0.5% both from a year earlier and compared to October, data from the National Statistics Office showed on Saturday.
The drop was higher than Reuters forecasts, which pointed to a decline of 0.1% both year-on-year and month-on-month. The year-on-year decline in the CPI was the steepest since November 2020.
The figures add to recent mixed trade data and manufacturing surveys that have kept alive calls for greater political support to shore up growth.
Annual core inflation, which excludes food and fuel prices, was 0.6%, the same as in October.
Although consumer prices in the world’s second largest economy have been on the brink of deflation in recent months, Chinese Central Bank Governor Pan Gongsheng stated last week that inflation was expected to “rise.”
The producer price index (PPI) fell 3.0% year-on-year compared to a 2.6% decline in October, marking the fourteenth consecutive month of decline and the fastest since August. Economists had forecast a 2.8% drop in November.
China’s economy has faced multiple headwinds this year, including rising local government debt, a failing real estate market and weak domestic and foreign demand. Chinese consumers, in particular, have tightened their belts, wary of the uncertainty of the elusive recovery.
Source: Ambito
