Beijing's woes mount as deflation grips China
Just hours after its exports went sharply backwards, China officially sank into deflation. That will add to pressure on Beijing to shore up the economy.
China’s slide into deflation adds to a raft of data fuelling concerns over the health of the world’s second-largest economy and increases pressure on Beijing to provide fresh stimulus to shore up growth.
The consumer price index fell 0.3% from a year earlier, reflecting the difficulty policymakers have faced in propping up confidence and business demand after an initial resurgence following the end of pandemic restrictions. Producer prices also fell, for the 10th straight month.
The deflationary print comes a day after official data showed Chinese exports contracted by 14.5% in dollar terms, the worst figures since February 2020 and lower than consensus estimates. Imports fell 12.4%, the worst since January.
China’s economy has struggled to roar back to life after abandoning its zero-Covid restrictions late last year, with policymakers in Beijing also grappling with weakening property prices and youth unemployment nudging over 20%, all compounded by waning foreign demand.
