China's consumer inflation drops to 5-month low in November
Date
12/9/2024 2:34:25 AM
(MENAFN) China's consumer inflation dropped to a five-month low in November, rising just 0.2 percent year-on-year, according to data from the National Bureau of Statistics. The figure fell short of market expectations, which anticipated a 0.5 percent increase, and highlighted ongoing challenges to Beijing's stimulus measures aimed at reviving domestic demand. This comes despite the launch of a USD 1.4 trillion support package designed to bolster consumption, which contributes roughly 70 percent to the growth of the world's second-largest economy. Core inflation, excluding volatile food and fuel prices, edged up slightly to 0.3 percent in November from 0.2 percent in October.
China’s producer price index (PPI) also continued its prolonged decline, falling for the 26th consecutive month. November's PPI dropped 2.5 percent compared to the same month last year, slightly better than the expected 2.8 percent decline but lower than October's 2.9 percent decrease. Prices for industrial products saw significant reductions, with ferrous metal prices down 7.1 percent, fuel and energy prices falling 6.5 percent, and chemical raw materials dropping 5 percent. The persistent deflation in producer prices underscores the challenges facing industrial sectors and highlights ongoing imbalances between supply and demand.
Despite a slight easing in producer price deflation, it remains entrenched, with manufacturing input inventories and finished goods continuing to accumulate. This ongoing mismatch has exerted downward pressure on prices, creating deflationary conditions across industrial markets. Retail inflation, meanwhile, remains near zero, reflecting weak domestic demand that persists despite Beijing's significant stimulus measures.
Since September, Chinese authorities have introduced various strategies to reinvigorate the economy, including interest rate cuts, efforts to support stock and property markets, and initiatives to boost bank lending. However, the latest data shows that these efforts have yet to deliver significant results, as both consumer and producer prices remain subdued, highlighting the continued economic headwinds the country faces.
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