The data is here:
Summary (summary of Reuters report):
-
Consumer Price Index:
- China's CPI rose 0.2% in 2024, matching the previous year's growth and falling well below the 3% target.
- December's CPI increased 0.1% year-on-year, slowing from 0.2% in November and marking the weakest pace since April.
- Core inflation, excluding food and fuel, rose to 0.4% in December, the highest rate in five months.
-
Producer Price Index:
- Factory gate prices fell for the 27th consecutive month, with the PPI falling 2.3% in December year-on-year, an improvement from a 2.5% decline in November.
-
Economic challenges:
- Weak domestic demand is persistently driven by:
- Job insecurity.
- Prolonged housing market decline.
- High debt levels.
- Uncertainty about US trade policies under President-elect Donald Trump.
- Discounting is widespread across retail categories, including items such as bubble tea and luxury goods, while consumers are increasingly renting rather than buying discretionary items.
- Weak domestic demand is persistently driven by:
-
Promotional measures:
- Policy stimulus has temporarily supported demand and prices, but analysts expect its effects to fade, with inflation likely to weaken later in 2025.
- Beijing has lifted fiscal measures, including:
- A record $411 billion in specific financial bond insurance.
- Plans for substantial funding from ultra-long term financial bonds in 2025.
- $41 billion allocated for equipment upgrades and trade in consumer goods, including vehicles.
-
Analyst preview:
- Economists point to continued deflationary pressures, with the recovery of inflation linked to the effectiveness of fiscal policies.
- The decline in the property sector continues to drag on consumer confidence.
- While the World Bank has updated China's growth forecast for 2024–2025, domestic and business sentiment remains a source of concern.
CPI:
This article was written by Eamonn Sheridan at www.forexlive.com.
Source link
