China’s Consumer Price Index (CPI) recorded a year-on-year increase in October, defying expectations, according to official data released Sunday. This comes after months of stagnation and weak consumer spending amid the economic challenges facing the country.
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China is striving for a strong economic recovery following the COVID-19 pandemic, while dealing with a debt crisis in its vast real estate sector, declining consumption, and rising youth unemployment.
The CPI, a key measure of inflation, rose 0.2% year-on-year last month, according to the National Bureau of Statistics. This outcome was somewhat unexpected, as a Bloomberg survey of analysts had forecast a 0.1% decline.
The index had experienced a contraction in July, followed by two months of declines. Economic tensions with the United States have further complicated China’s economic situation. However, the two largest economies reached an agreement following a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping in South Korea at the end of October.
Meanwhile, China’s Producer Price Index (PPI) fell in October, but at a slower pace than the previous month. The PPI, which measures prices of goods before they leave factories for wholesale markets, declined 2.1% year-on-year in October, compared to 2.3% in September.
Falling producer prices reduce profit margins for companies engaged in intense price competition, prompting authorities to take measures to stabilize the market.
—Reuters
