Negative Consumer Inflation in China After 13 Months

For the first time since the beginning of last year, China's consumer price index (CPI) has decreased into the negative zone, as prices for goods such as food, alcohol, and tobacco have dropped.

In February, the CPI showed a 0.7% decrease from the same time last year, according to information released on Sunday by China's National Bureau of Statistics. This follows a 0.5% increase noted in January.

Economists surveyed by Reuters had anticipated a 0.5% annual decline, indicating that the actual figures fell short of these predictions.

In a month-to-month comparison, the February CPI dipped by 0.2%, a contrast to the 0.7% rise observed in the preceding month of January.

Amidst these figures, stakeholders are monitoring whether Beijing's economic policies and interventions can bolster the country's sluggish economic resurgence.

Economic Growth and Inflation Targets in China

Midweek, China set a GDP target for the year 2025, detailing strategies to sustain economic growth through bolstering domestic consumption.

Additionally, Beijing adjusted its annual consumer inflation goal to 'around 2%'—the lowest it has been in more than twenty years—from the previous years' target of 3% or more, as reported by the Asia Society Policy Institute.

This inflation target is more about capping inflation rather than an aim to achieve a specific rate.

Economists suggest that reaching China's growth ambition of approximately 5% this year could be quite challenging, especially due to continued weak domestic consumer demand and economic tensions with the U.S.