China is continuing to experience weak demand, with the country’s consumer price index (CPI) registering a year-on-year increase of only 0.1 percent in March, recent data from the National Bureau of Statistics (NBS) show.
Compared to the previous month, there was a one percent drop in the CPI in March, according to NBS representative Dong Lijuan who spoke with Xinhua. He reasoned that the causes were related to the lower seasonal demand from consumers and the adequate market supply following Chinese New Year.
In terms of food prices, the overall figure in March fell by 2.7 percent against the corresponding month last year. The number also marks a decrease of 1.8 percent compared to February.
Non-food prices meanwhile witnessed a growth of 0.7 percent year-on-year, a slight drop in relation to February’s rate of 1.1 percent.
[See more: China has set a GDP target of 5 percent for 2024]
Zhiwei Zhang, an economist at Pinpoint Asset Management, noted in the Economic Times that the dwindling growth “indicates that China still faces the risk of deflation, as domestic demand remains weak.”
Other professionals, however, contended that China was not in “a deflationary spiral,” but suggested the government could cut rates further in order to stimulate growth.
In recent years, China’s economy has seen a slow down due to various factors, including low consumer confidence and demand, problems with its property market, youth unemployment, an ageing population and geopolitical tensions with the Western bloc.
Despite the economic challenges, the country has set a goal of 5 percent GDP growth this year.
