China’s economy has gone from bad to worse – and it is only February. Figures released on Thursday showed consumer prices fell by 0.8% in January compared with a year earlier, outstripping economists’ expectations and marking the biggest contraction in 15 years. Prices in China have been flat or falling nearly continuously since July. Although the country’s zero-Covid policy was abandoned more than a year ago, consumers are still cautious about spending, both on everyday goods and on property, which has traditionally been the driver of growth in China’s gross…
Tag: Deflation
China consumer prices plunge at fastest rate for 15 years as deflation fears deepen
China’s consumer prices fell at their fastest pace in 15 years in January, as the world’s second-largest economy sank deeper into deflation amid weakening demand. Data released on Thursday showed that China’s consumer price index tumbled last month, falling by 0.8% compared with a year earlier. It marks the fourth consecutive month of declines, as well as the sharpest drop since September 2009, when the global economy was still grappling with aftershocks from the 2008 banking crisis. Food prices were the biggest drag on the headline inflation figure, having fallen…
China’s economy is struggling but fears of sustained deflation are premature
China’s economy is struggling. The recovery after the lifting of Covid-19 restrictions is faltering. Its trade with the rest of the world is shrinking. A decade-long boom in house prices has come to an end. The most obvious manifestation of the troubles besetting the world’s second biggest economy is that China is now officially in deflation. In the US, the UK and the eurozone, prices are rising – albeit not quite as fast as they were a few months ago – but in China they are actually falling. News of…