China’s consumer price index (CPI) last month grew by just 0.1 percent year-on-year, its slowest rate since April 2024, according to data from National Bureau of Statistics.
The figure also marks the fourth consecutive month that the country’s CPI has been dropping, with growth falling from 0.6 percent to 0.2 percent between August and November of last year.
This trend will be a cause for concern for the central government, which has been attempting to shore up the world’s second largest economy with various stimulus measures, including the slashing of mortgage interest rates back in September.
The full-year CPI for 2024 meanwhile showed an increase of only 0.2 percent year-on-year. The growth rate was identical to that of 2023 and fell well below the roughly 3 percent target that the government had set.
“The deflationary pressure is persistent,” Zhang Zhiwei, the president and chief economist of Pinpoint Asset Management said in remarks cited by multiple media outlets. “The property sector downturn has not ended, which continues to weigh on consumer sentiment.”
[See more: Macao’s latest consumer confidence survey sends mixed signals]
Zhang also pointed out that the “effectiveness of [China’s] fiscal policy” would largely dictate the country’s inflation outlook.
“Recent economic data has stabilised but the momentum is not strong enough to generate upward pressure on consumer prices yet,” he said.
China’s economy is currently facing a host of internal and external issues, including a dwindling property market, weak domestic demand, overseas tariffs and surging youth unemployment.
The imminent return of Donald Trump to the White House is expected to add to China’s economic woes, as his incoming administration threatens to impose punitive new tariffs on Chinese imports.
Despite the challenges ahead, Chinese President Xi Jinping said in his New Year’s Eve address that the economy remained stable and that the country was forecast to hit its 2024 GDP growth target of around 5 percent.
