China’s CPI reflected a modest improvement in December, rising from -0.5% yoy to -0.3% yoy, slightly better than the expected -0.4% yoy. Despite this improvement, December marks the third consecutive month of negative CPI readings, indicating ongoing deflationary pressures in the Chinese economy. The month-on-month CPI also saw a shift, registering 0.1% increase compared to the -0.5% decline in November. Core CPI, which excludes the typically volatile food and energy prices, remained steady at 0.6% yoy, mirroring November’s figure.
NBS noted that pork prices continued to be a significant factor influencing the year-on-year CPI, with a decrease of -26.1% yoy , but narrowd from November’s -31.8% yoy decline. Services inflation demonstrated a steady rise, with notable increases in tourism and hotel accommodation prices, which surged by 6.8% yoy, and 5.5% yoy, respectively.
PPI also improved from -3.0% yoy to -2.7% yoy, but fell short of the anticipated -2.5%. This marks the 15th consecutive month of decline in the PPI. NBS attributed this continued decline in PPI to several factors, including drop in international oil prices and lack of demand for certain industrial products.
