According to official data, China’s consumer prices have slipped into deflation for the second time this year, indicating a weakness in domestic demand despite the government’s efforts to boost growth.
Consumer-Price Index (CPI)
The consumer-price index fell 0.2% in October compared to the previous year, following a flat performance in September. Economists had predicted a smaller decline of 0.1%.
China last experienced deflation in July when the CPI fell by 0.3%. Dong Lijuan, a senior statistician with the National Bureau of Statistics, attributes the slight decrease in October to factors such as favorable weather, an ample supply of agricultural products, and reduced consumer demand after the holidays.
Food Prices
In October, food prices saw a more significant decrease of 4.0%, compared to a 3.2% decline in September. Notably, pork prices plummeted by 30.1%, following a 22.0% decline the previous month.
Nonfood Prices
Nonfood prices saw a modest increase of 0.7%, mirroring September’s growth rate.
Core CPI
China’s core CPI, which excludes volatile food and energy prices, rose by 0.6% in October, marking a slight decrease from the 0.8% increase seen over the past three months.
Monthly Basis Comparison
Month-to-month, China’s CPI declined by 0.1% in October, contrasting with the 0.2% increase recorded in September.
Producer-Price Index (PPI)
In October, China’s PPI dropped by 2.6% compared to the previous year, slightly less than September’s fall of 2.5%. Economists had foreseen a decline of 2.7%.
On a monthly basis, China’s PPI remained unchanged, in contrast to the 0.4% increase witnessed in September.
Overall, these statistics highlight concerns regarding deflation and the need for continued efforts to stimulate domestic demand in China’s economy.