China inflation: disappointing price indicators cast shadow on target, fuel calls for swift policy easing
- Consumer price index grew by 0.1 per cent, while factory-gate prices fell for 18th straight month, as low demand and overcapacity cloud recovery prospects
- Unlike many Western countries, including the US, that have been seeing high levels of inflation, China has experienced minimal growth since a year ago
![China’s factory-gate prices fell for 18th straight month in March. Photo: AFP](https://cdn.i-scmp.com/sites/default/files/styles/1020x680/public/d8/images/canvas/2024/04/11/d9a99e8f-e033-4756-9c79-2459d4846e48_988dece8.jpg?itok=sbwauO7I&v=1712799313)
Further disappointing levels of inflation in China have cast a growing shadow over its recovery trajectory, adding urgency to calls for monetary easing to stave off the risk of deflation and invigorate economic growth.
China’s consumer price index (CPI) grew by a lower than expected 0.1 per cent year on year in March, the National Bureau of Statistics said on Thursday.
The subdued figure came as China faces a persistent property slump and sluggish job market, which have eroded consumers’ willingness to spend and dampened market expectations.
“Beijing is very unlikely to attain its CPI target of 3 per cent for 2024, and the final figure may hover around 1 per cent,” said Larry Hu, chief China economist at Macquarie Capital.
China has yet to step into deflation – deflation suggests an overall downward economic spiral
The low CPI reading underscores Beijing’s need to speed up interest rate cuts, Hu added, pointing out that doing so could help alleviate the mortgage burden on residents and help allocate more funds towards consumption.
![](https://assets-v2.i-scmp.com/production/_next/static/media/wheel-on-gray.af4a55f9.gif)