Consumer and producer prices continue to decline in China
The stagnation in consumer prices and the ongoing decline in producer prices in China continued in April.
China National Bureau of Statistics (UIB) announced April 2024 data on price increases in the country. Accordingly, the Consumer Price Index (CPI) increased by 0.3 percent compared to the same period last year, while the Producer Price Index (PPI) decreased by 2.5 percent.
The deflation trend continued to be felt in April with the stagnation in consumer prices and the ongoing decline in producer prices.
Although CPI, which is considered the main indicator of inflation, recorded an annual increase of 0.3 percent in April and exceeded 0.1 in March, it continued its stagnant course. Consumer prices increased by 0.1 percent compared to March.
CPI, which rose for the first time in 6 months due to the effect of increased expenditures during the Spring Festival holiday period, where the Lunar New Year was celebrated in February, recorded its last increase in August 2023, and after remaining stable in September, it entered a negative course in the last quarter of 2023.
CPI decreased by 0.8 percent in January this year, recording its fastest annual decline since September 2009.
Producer prices have been declining for 19 months
The decline in producer prices, which has been ongoing for 18 months, continued in April. PPI, calculated from ex-factory prices of manufactured products, fell by 2.5 percent.
The decline recorded in PPI in the last quarter of 2022 continued throughout 2023. Producer prices decreased by 2.5 percent on an annual basis in January, 2.7 percent in February and 2.8 percent in March in 2024.
Weakness in domestic demand, local governments’ debt risks and the decline in the real estate sector continue to negatively affect the growth of China, the world’s 2nd largest economy.
At a time when inflation remains high in the world, especially in developed economies, following the Covid-19 epidemic, it is observed that the reverse trend has taken root in China.