BEIJING (Reuters) – China’s factory-factory prices fell for a second straight month in November, while consumer inflation slowed, pointing to subdued activity and weak demand in an economy that has been dampened by strict epidemic control measures. .
Analysts said they expected the government to keep interest rates low and take steps to boost confidence.
The producer price index (PPI) fell 1.3% year-on-year, unchanged from the annual contraction in October, according to data released by the National Bureau of Statistics (NBS) on Friday. That was less than the 1.4 percent drop seen in a Reuters poll.
The consumer price index (CPI) rose at its slowest pace in eight months in November, rising 1.6% from a year earlier, which was down from October’s 2.1% annual gain, but Consistent with a Reuters poll.
“These data suggest that economic momentum is (continuing) weakening,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
A high-level political meeting of the ruling Communist Party’s Politburo meeting on Tuesday emphasized that the government will focus on stabilizing growth and boosting domestic demand
Zhang said that although the government has eased control over the epidemic in the past week, it will take further measures to stimulate the economy.
“The Politburo meeting … determined that lack of confidence is a major problem in the economy,” he said. “I expect the government to do more to boost market and household confidence. The rapid pace of reopening shows the government’s sense of urgency.”
Growth in the world’s second-largest economy has slowed this year , as global demand also faltered, largely affected by uncompromising COVID-19 containment.
Record COVID-19 infections and associated containment measures have disrupted production and restricted mobility.
While markets cheered the shift in pandemic policy, economists say economic growth is likely to be subdued in the coming months as infections surge, with the economy only in 2023 Later rebound.
China’s PPI is negative, CPI growth slows down in November https://inew.news/wp-content/uploads/2022/12/localimages/chart.png6392e528adf5e.png
Steel industry causes producer deflation where prices fall by .7%.
Some of the slowdown in consumer price growth was due to the food market.
Food prices rose 3.7% YoY, compared with a 7.0% rise in October. Among the food categories, pork was a factor in moderating inflation: it was 19. November was 4% higher than the same month last year, but October’s annual gain was 51.8%.
Underlying core annual inflation in November (no Including volatile food and energy prices) was only 0.6%, unchanged from October
“Overall inflationary pressures in China remain benign, we expect ‘s CPI inflation will be around 1.6%, lower than 2.0% in 51. In view of this, the monetary policy will remain loose in the coming year,” said Guotai Junan Group Chief Economist Zhou Hao said.
China’s central bank has maintained the one-year benchmark lending rate at 3.51% since August. It expects consumer inflation to remain modest next year.