Deflationary pressure in China is worsening as consumer prices increased at the slowest pace in two years, suggesting weakness in domestic demand and a long road ahead to full economic recovery.
The consumer price index rose by just 0.1% in April from a year ago, the lowest rate since February 2021, according to the National Bureau of Statistics on Thursday. In March and February, it increased 0.7% and 1% respectively.
The producer price index, which measures factory-gate prices, declined by 3.6%, marking the biggest contraction in three years. It’s the seventh straight month the figure has fallen.
Prices are stagnating or falling in the country despite the fact that the People’s Bank of China, the central bank, has been cutting interest rates and pumping cash into the financial system to bolster the economy.
This is a developing story and will be updated.