China’s consumer inflation quickens to 21-month high, producer deflation persists
[BEIJING] China’s annual consumer inflation accelerated to a 21-month peak in November, mainly driven by food prices, while factory-gate deflation deepened, with underlying trends suggesting domestic demand remains weak and unlikely to recover in the near term.
The consumer price index (CPI) rose 0.7 per cent from a year earlier, National Bureau of Statistics data showed, matching a 0.7 per cent expansion in a Reuters poll of economists. It increased 0.2 per cent in October.
The pickup in consumer inflation was mainly driven by rising food prices, which increased 0.2 per cent year on year (yoy) after dropping 2.9 per cent in October.
But annual core inflation, which excludes volatile prices of food and fuel, was unchanged at 1.2 per cent last month. On a monthly basis, CPI dipped 0.1 per cent versus a 0.2 per cent rise in October and a forecast gain of 0.2 per cent.
Factory-gate deflation has also persisted in China for three years, even as the government stepped up a campaign to curb industrial overcapacity and made calls on key sectors to scale back cut-throat competition. The latest data showed few signs of a recovery in the deflationary impulse.
The producer price index fell 2.2 per cent yoy in November, compared with a 2.1 per cent fall in October and worse than the forecast for a 2 per cent drop. The index was up 0.1 per cent from October.
The US$19 trillion Chinese economy, buoyed by policy support and resilient goods exports, is on course to meet Beijing’s growth target of “around 5 per cent” for the year.
However, in order to foster sustainable longer-term growth, analysts say the government needs to stabilise the faltering property sector, lower the youth unemployment rate, and build a better social safety net to encourage spending.
The country’s top leaders have pledged to better balance supply and demand, and signalled a shift towards supporting household consumption and restructuring the economy over the next five years.
The Politburo, a top decision-making body of the ruling Communist Party, vowed on Monday (Dec 8) to keep expanding domestic demand and support the broader economy with more proactive policies in 2026. REUTERS
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