China Sees Uptick in Consumer Inflation as Deflation Risks Continue

China

CHINA: China’s consumer inflation edged up to a 34-month high in December, yet broader deflationary risks remain entrenched. Data from the National Bureau of Statistics showed CPI rising 0.8% year-on-year, slightly higher than November. However, full-year inflation was flat-the weakest in 16 years, highlighting fragile demand amid a prolonged property downturn, weak job prospects, and external pressures, including the global trade war under Donald Trump. Policymakers continue to signal further stimulus to stabilise prices and confidence.

Producer prices remain firmly in deflation, with PPI falling 1.9% in December and 2.6% for the year, underscoring persistent overcapacity. While officials cited higher global commodity prices and capacity controls as moderating forces, economists argue that excess supply remains unresolved. Core inflation remained subdued at 1.2%, pointing to underlying price weakness once the impact of gold prices is excluded.

Source: The Business Times