ATS
Inflation in China continued to slow in November, according to official data released Monday, showing sluggish consumption despite the government’s recovery efforts.
The consumer price index, a key barometer of the vitality of household consumption and economic activity in the world’s second largest economy, increased by only 0.2% in November year-on-year, compared to 0.3% in October. , according to the National Bureau of Statistics (NBS).
This figure is lower than the forecasts of economists surveyed by the Bloomberg agency (+0.4%).
Beijing has increased its stimulus plans in recent months in the hope of giving a boost to domestic activity and permanently removing the specter of deflation.
Unlike the high inflation seen in many countries, China faces stagnant prices, which hampers economic growth and increases the real value of debts.
The Asian giant has already plunged into deflation for four months at the end of 2023, recording the sharpest contraction in consumer prices in 14 years in January.
Since the end of 2022, “ex-factory” prices – that is to say prices excluding transport – have also continued to decline. In November, they fell 2.5% year-on-year, after a drop of 2.9% in October, the BNS said.
In recent months, the authorities have announced interest rate cuts, relaxations of restrictions on the purchase of housing, and even an increase in the debt ceiling for local governments.
But many economists believe that a more direct fiscal stimulus, targeting support for domestic consumption, is necessary to fully strengthen Chinese economic health.
“Activity has stabilized, but the recovery is not strong enough to boost inflation,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, said in a note.
“Much greater budgetary support is needed to get China out of this deflationary situation,” he adds.
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