China's consumer price index rose a modest 0.1% year-on-year in December, stoking concerns about deflation as the pace of inflation slowed from the previous month. Producer prices also continued to decline.
China's consumer prices in December edged up 0.1% year on year, in line with expectations, data from the National Bureau of Statistics showed Thursday, but the slower rise from the previous month stoked deflation concerns. Analysts polled by Reuters had expected the consumer price index to slip to 0.1% in December from 0.2% in November on a year-on-year basis. China's producer price inflation fell by 2.3% year on year in December, declining for the 27th month.
The reading is slightly better than Reuters estimates of a 2.4% decline. The ongoing near-zero consumer inflation indicates that China continues to struggle with weak domestic demand that has raised the specter deflation. Although China's economy displayed some signs of recovery following the policy shift in September, it continues to face significant challenges,' said Carlos Casanova, a senior economist at private bank Union Bancaire Privée, citing the country's property sector headwinds and trade tensions with the U.S. Louise Loo, lead economist at Oxford Economics expects that China's path to reflation will still underwhelm most estimates given the enduring weakness in consumer spending appetite
CHINA INFLATION DEFLATION CONSUMER PRICES ECONOMY
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