Let us know about free updates
Simply sign up for Myft Digest in China’s economy and it will be delivered directly to your inbox.
China’s consumer prices fell for the first time in February in 13 months, skewed by seasonal factors, suggesting that deflationary pressures continue to strain the world’s second-largest economy.
The consumer price index fell 0.7% in February from the previous year’s previous year, the National Bureau of Statistics said on Sunday that it was deeper than the expected 0.4% drop by economists in a Bloomberg poll.
The Bureau of Statistics said New Year’s holidays, which are earlier than usual, are the main reasons for the decline. Prices tend to rise on holidays that fall on different dates each year, as consumers spend more on travel and food.
The holiday began on January 29th this year, compared to February 10th last year. NBS’s estimated consumer prices rose 0.1% when adjusted to the new year’s shift for the month, saying there was a “mild price recovery.”
Producer prices, a measure of factory gate inflation, contracted only a small improvement of 2.2% in February, a 29th consecutive month decline, and a 2.3% improvement in the previous month.
The Statistics Office has returned from holidays, increasing supply of fresh vegetables and prices fell in February as prices fell 12.6%, the Statistics Office said.
Some content could not be loaded. Please check your internet connection or browser settings.
China’s core CPI, which stripped its volatile food and energy costs, fell 0.1% for the first time since 2021. The data also shows pricing pressure in China’s competitive electric vehicle market, with prices falling 6% from the previous year.
Economists will monitor data releases next month to better understand whether Beijing’s move to bolster the economy, including the RMB30 billion ($4 billion) program to subsidize home appliance purchases, is affecting consumer and business spending.
Recommended
On Wednesday, Beijing announced its ambitious GDP growth target of “about 5%” for 2025 during its annual review of government economic goals and policies.
It also announced RMB4.4TN for special municipal bonds for infrastructure and other investments, and RMB1.3TN for special central government bonds, which economists said were slightly less than expected.
In a sign that leaders are aware of the country’s deep deflation pressure, Beijing set a lowest inflation target in 2025 in over 20 years, aiming to grow consumer prices from last year’s 3% target, aiming to reach around 2%.
