China’s consumer prices slipped back into decline in August, highlighting persistent deflationary pressures, while a narrower drop in factory-gate prices suggested Beijing’s “anti-involution” campaign may be starting to take hold.
The national consumer price index (CPI), a key gauge of inflation, fell 0.4 per cent year on year last month, according to data released by the National Bureau of Statistics on Wednesday.
The reading was worse than market expectations of a 0.2 per cent drop in a poll by financial data provider Wind. In July, the CPI remained unchanged from the same month last year.
China is struggling with entrenched deflationary pressures, as weak domestic demand and industrial oversupply weigh on prices while trade uncertainty hampers suppliers’ efforts to clear their stock.Dong Lijuan, a senior statistician at the bureau, said the fall in CPI was “mainly due to the high base from a year earlier” and the fact that food prices were weaker than their average seasonal level.
“By category, the main factor was lower food prices,” she said, adding the core CPI’s year-on-year increase expanded for a fourth consecutive month, thanks to the continued effect of policies aimed at boosting domestic demand.