BEIJING: Deflationary pressures persisted in China, with both consumer and producer prices falling in September, official data showed on Wednesday (Oct 15), as a prolonged property market downturn and trade tensions weighed on consumer and business confidence.
China’s export growth bounced back in September, but renewed trade measures and threats from Beijing and Washington have rekindled concerns about jobs and further deflation.
Producer prices (PPI) in September fell 2.3 per cent from a year earlier, narrowing from a 2.9 per cent fall in August, National Bureau of Statistics (NBS) data showed. It marked the smallest decline in seven months, partly due to extensive government efforts to curb price competition and was in line with expectations.
The consumer price index (CPI) dipped 0.3 per cent last month from a year earlier, less than a 0.4 per cent fall in August and compared with a 0.2 per cent fall in a Reuters poll of economists.
“We continue to expect both CPI and PPI to stay in deflation this year and next,” said Zichun Huang, China economist at Capital Economics.
“Policymakers are now taking deflation more seriously. But we doubt that supply-side solutions they are proposing will succeed without substantial demand-side support,” she said.
On a monthly basis, CPI was up 0.1 per cent, versus no change in August, and below a forecast 0.2 per cent increase.
Core inflation, which excludes volatile food and fuel prices, was 1 per cent in September from a year earlier, accelerating from 0.9 per cent in August and hitting a 19-month high.
