November Sees China’s Consumer Inflation Hit Five-Month Low

Image Credit: Reuters

 

China's consumer inflation hit a five-month low in November, while producer prices continued to fall, despite support from recent stimulus measures.

The world’s second-largest economy faces challenges, including the potential for new tariffs under a second Donald Trump administration, suggesting that more policy stimulus will be required to boost fragile growth. The consumer price index (CPI) rose by 0.2% year-on-year in November, down from 0.3% in October and below the 0.5% forecast in a Reuters poll of economists. The CPI also declined 0.6% month-on-month, compared to a 0.3% drop in October, with a forecast of a 0.4% decline.

Core inflation, which excludes volatile food and fuel prices, slightly increased to 0.3% from 0.2% in October.

Despite stronger-than-expected household spending, driven by subsidies for auto and home appliance trade-ins, China’s economy has yet to show a significant recovery. Rather than directly injecting money, the government introduced a 10 trillion yuan ($1.37 trillion) debt package in November to ease local government financing.

Advisers are recommending a 5.0% economic growth target for 2025, calling for stronger fiscal stimulus to counter the effects of potential U.S. tariff hikes on exports. The producer price index (PPI) dropped by 2.5% year-on-year in November, an improvement from October’s 2.9% decline but still above the 2.8% expected drop.

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.