2024-12-09
China's November CPI Indicates Deflation Remains Unaffected by Policy Stimulus
China CPI increased by 0.2% year-on-year in November, a decrease of 0.1 percentage points from the previous period, according to data released by the National Bureau of Statistics on December 9. On a month-on-month basis, CPI declined by 0.3%, falling 0.3 percentage points compared to the prior month, indicating that despite dual monetary and fiscal stimulus measures, deflationary pressures in China have not significantly eased.
Breaking down the components, food prices, a key driver of CPI growth, saw a further decline, with the year-on-year increase narrowing by 2 percentage points to 0.9%. Non-food prices posted a year-on-year change of 0.0%, up 0.3 percentage points, reflecting a slower decline in crude oil prices. Meanwhile, service prices maintained a year-on-year increase of 0.4%. Core CPI, which excludes food and energy, rose by 0.3% year-on-year, a marginal increase of 0.1 percentage points from the prior period.
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In terms of the Producer Price Index (PPI), China's PPI declined by 2.5% year-on-year in November, an improvement of 0.4 percentage points from October, but marking the 26th consecutive month of contraction. On a month-on-month basis, PPI rose by 0.1%, up 0.2 percentage points from the previous period.
The producer goods prices fell by 2.9% year-on-year, an improvement of 0.4 percentage points from October, driven by sustained demand resulting from various incremental policies. Consumer goods prices narrowed their year-on-year decline to 1.4%, improving by 0.2 percentage points. Among durable goods, automobile factory prices continued to drop by 3.1% year-on-year, while the output prices of computers, communications, and other electronic products reduced their year-on-year decline by 0.4 percentage points to 2.5%.
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Overall, China's recent accommodative policies appear to have delivered limited impact. While some economic indicators have shown signs of recovery, overall consumer spending remains weak, keeping deflationary pressures unresolved. As the Central Economic Work Conference convenes this week, markets will closely watch for stronger stimulus measures from the Chinese government to address deflation risks effectively.