Sharecast News
08 Feb, 2024 08:02 08 Feb, 2024 08:40

China deflation accelerates in January as demand stagnates

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Sharecast / GuangWu Yang via Pixabay

Deflation in China accelerated at its fastest pace in 15 years, as weak demand continued to hamper Communist Party efforts to bolster the struggling economy.

The consumer price index fell 0.8% year-on-year in January, according to data released on Thursday – faster than the 0.5% expected, the fourth straight month of declines and biggest contraction since the 2008 financial crisis.

Food prices fell 5.9% year-on-year, with a 17% slump in pork prices a major contributor to the decline.

“In plain English, it means that the Chinese efforts to boost growth and bring inflation back are not working according to the plan,” said Swissquote analyst Ipek Ozkardeskaya.

“Money poured into the Chinese system doesn’t circulate in a way to stimulate economy – blame people who lost confidence – and the radical measures that the government has put in place to prop up equity valuations hardly help China’s battered stock markets to get back on their feet.”

"Another worry about the Chinese recovery is that because the Chinese dream has been dashed by a $7trln selloff in the equity markets, many could be tempted to take their loss and walk away in the slightest recovery. In summary, the road to a sustainable recovery seems far away.”

Reporting by Frank Prenesti for Sharecast.com


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Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.

The value of investments can fall and you may get back less than you invested.