BEIJING - Chinese consumer prices fell in January at their quickest rate in more than 14 years, data showed Thursday, piling pressure on the government for more aggressive moves to revive the country’s battered economy.
Officials have struggled for months to kickstart economic growth as they battle a range of headwinds, including a prolonged property-sector crisis, soaring youth unemployment and a global slowdown that is hammering demand for Chinese goods. Policymakers have in recent months announced a series of targeted measures as well as a major issuance of billions of dollars in sovereign bonds, aimed at boosting infrastructure spending and spurring consumption. But that, and recent announcements including central bank interest rate cuts and measures to boost lending, have had little impact so far. And analysts warn a “bazooka” stimulus plan is needed to restore confidence. “China needs to take actions quickly and aggressively to avoid the risk of deflationary expectation to be entrenched among consumers,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said.
CHINA’S PPI DOWN 2.5PC IN JAN
China’s producer price index (PPI), which measures costs of goods at the factory gate, fell 2.5 percent year on year in January 2024, the National Bureau of Statistics said Thursday. The decrease narrowed from a 2.7-percent decline in December. On a monthly basis, the January PPI edged down 0.2 percent, the data showed. “Due to factors such as fluctuations in the international commodity prices and some domestic industries entering the off-season, the PPI declined in January. However, both year-on-year and month-on-month declines reduced,” said NBS statistician Dong Lijuan. Prices of means of production fell 0.2 percent month on month, contributing 0.17 percentage points to the overall decline in monthly PPI for January, NBS data showed. Among the major industries, the PPI of the oil and gas extraction industry fell 0.8 percent month on month, while the petroleum, coal and other fuel processing sector fell 1.7 percent from the previous month. The PPI of coal mining and washing industry edged up 0.1 percent month on month due to increased heating demand in some regions. China’s consumer price index, a main gauge of inflation, edged up 0.3 percent month on month in January 2024, NBS data showed.