The China is experiencing deflation for the first time in almost two years, yet another sign that Beijing might need to introduce stimulus measures to revive its stuttering economy.
According to data from the National Bureau of Statistics, the consumer price index (CPI), which measures the cost of an average shopping basket, fell 0.3% in July.
According to the government agency, factory gate prices plunged 4.4% year-on-year last month, their tenth consecutive decline.
Since December 2020, both indices have fallen in tandem for the first time since February 2021.
According to the latest figures, China is experiencing deflation, or when prices start to fall rather than rise like they are in the US.
Beijing is also grappling with faltering growth, skyrocketing youth unemployment, and massive debt.
Steve Clayton, Hargreaves Lansdown’s head of equity funds, said that the actual cost of goods has fallen both in stores and at factory gates. “This is indicative of a slowdown in the Chinese economy, which is heavily indebted.”.
Analysts expect more calls for fiscal stimulus after Wednesday’s data.
Despite promises to boost the economy “with precision and force” last month, policymakers have yet to implement so-called “big bang” measures.
According to Deutsche Bank research strategist Jim Reid, the CPI and PPI are both falling simultaneously for the first time since 2020, which confirms an economic deflation.
Also Read:
- March quarter may grow due to gas, financials, and oil
- List Of The 10 World’s Top Oil and Gas Companies
- Crude oil prices: What factors have been weighing over them?
- China-Pakistan Partnership: Is Paying for Oil in Yuan a Solution to Pakistan’s Troubled Economy?
- Foxconn Technology Group plans $700 million Investment India plant as it shifts from China
- Researchers find tallest tree in China’s karst landscape
4 Comments