China’s consumer prices stuck in decline, factory-gate deflation persists

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China's consumer prices stuck in decline, factory-gate deflation persists © Reuters. Customers shop clothes at a stall inside a wholesale market in Beijing, China September 8, 2023. REUTERS/Tingshu Wang/File Photo

BEIJING (Reuters) – China’s consumer prices extended their decline for a third month in December while factory-gate prices also fell, highlighting persistent deflationary pressures in an economy struggling to mount a solid recovery.

The consumer price index (CPI) shed 0.3% in December from a year earlier, and was up 0.1% month-on-month, data from the National Bureau of Statistics (NBS) showed on Friday. November’s index dropped 0.5% in annual and monthly terms.

Economists polled by Reuters forecast a 0.4% fall in consumer prices year-on-year and a 0.2% gain month-on-month.

The producer price index (PPI) slid 2.7% after a 3% fall in November, marking the 15th straight month of declines. Analysts had expected a 2.6% tumble in December.

With a protracted housing downturn, a soft job market and other headwinds such as debt risks dampening growth prospects, consumers in the world’s second largest economy have been tightening the purse strings.

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