BEIJING, Oct 13 — China’s consumer inflation unexpectedly eased in September, while producer price deflation deepened, heightening pressure on Beijing to roll out more stimulus measures quickly to revive flagging demand and shaky economic activity.
Finance Minister Lan Foan told a news conference yesterday there will be more “counter-cyclical measures” this year, but officials did not provide details on the size of fiscal stimulus being prepared, which investors hope will ease deflationary pressures in the world’s second-largest economy.
The consumer price index (CPI) rose 0.4 per cent from a year earlier last month, against a 0.6 per cent rise in August, data from the National Bureau of Statistics (NBS) showed today, missing a 0.6 per cent increase forecast in a Reuters poll of economists.
The producer price index (PPI) fell at the fastest pace in six months, down 2.8 per cent year-on-year in September, versus a 1.8 per cent decline the previous month and below an expected 2.5 per cent decline.
Chinese authorities have stepped up stimulus efforts in recent weeks to spur demand and help meet an around 5.0 per cent economic growth target for this year, though some analysts say the moves may only offer temporary relief for the economy and stronger measures are needed soon.
The central bank in late September announced the most aggressive monetary support measures since the Covid-19 pandemic, including numerous steps to help pull the property sector out of a severe, multi-year slump, including mortgage rate cuts.
With little new from Saturday’s Ministry of Finance briefing, some analysts are now hoping that a meeting of China’s parliament expected in coming weeks will unveil more specific proposals.
However, many China watchers say Beijing also needs to firmly address more deeply-rooted structural issues such as overcapacity and sluggish consumption.
Excessive domestic investment and weak demand have pushed down prices and forced companies to reduce wages or fire workers to cut costs.
CPI was unchanged month-on-month, versus a 0.4 per cent gain in August and below an estimated 0.4 per cent increase.
Food prices perked up 3.3 per cent on-year in September compared with a 2.8 per cent rise in August, while non-food prices was down 0.2 per cent, reversing 0.2 per cent uptick in August.
Among non-food items, the decline in energy prices deepened, and tourism prices switched to down from up with declines in airfares and hotel accommodation prices widening, said the NBS in an accompanying statement.
Core inflation, which excludes volatile food and fuel prices, stood at 0.1 per cent, down from 0.3 per cent in August, also hinting that deflation pressures were mounting. — Reuters
