Consumer prices in China dropped the fastest in three years in November, while the factory gate depletion had deepened, which suggested a heightened deflationary pressure as the weaker domestic demands cast questions over the economic recovery.
The consumer price index fell by 0.5% both from a year before and in comparison to October, as per the data from the National Bureau of Statistics.
The drops were heavier than the median 0.1 percent fall, both YoY MoM forecasts in a Reuters poll.
The Consumer Price Change
The YoY CPI drop was the sharpest since November 2020.
The YoY core inflation, which excluded fuel and food prices, was 0.6 percent, which is the same as in October, which pointed to a daunting job that the Chinese authorities faced to revive the demand as the deflationary forces kept persisting.
Though the consumer prices in the second largest economy in the world have been teetering right on the edge of deflation in recent months, the Governor of China’s central bank, Pan Gongsheng, said in the previous week that inflation is expected to go upwards.
The PPI, or the Producer Price Index, dropped by 3.0% YoY against the 2.6% fall in October, which marked the 14th straight month of drop and the fastest since August. Economists made a prediction of a 2.8 percent drop in the month of November.
Combined trade data and manufacturing surveys have kept up calls for further policy support to help shore up the growth.
The economy of China has grappled with a number of headwinds this year, which included mounting debt of the local government, an unwell housing market, and unenthusiastic demand at home as well as abroad, with the customers tightening the purse strings, careful of such uncertainties despite a slippery economic recovery.