China's consumer price inflation experienced an unexpected slowdown, reaching a five-month low in November, while producer prices continued to decline. This suggests that Beijing's series of stimulus measures have had a limited effect on boosting domestic demand.
According to the National Bureau of Statistics, the consumer price index registered a modest annual rise of 0.2 percent, contrary to forecasts which anticipated an increase to 0.5 percent from October's 0.3 percent. The slight boost in inflation for November was primarily influenced by food prices, with pork prices soaring by 13.7 percent and fresh vegetable prices increasing by 10.0 percent.
Core inflation, which excludes food and energy costs, edged up slightly to 0.3 percent in November from 0.2 percent in the previous month. On a month-to-month basis, the decline in consumer prices intensified, doubling from 0.3 percent in October to 0.6 percent in November, despite economists' predictions of a 0.4 percent decrease.
The data further revealed that producer prices fell for the 26th consecutive month, decreasing by 2.5 percent year-on-year. However, this was a slower decline compared to the 2.9 percent contraction observed the previous month, with expectations of a 2.8 percent drop.
Gabriel Ng, an economist at Capital Economics, noted that the temporary effects of the stimulus and the unresolved fundamental imbalances between supply and demand suggest limited prospects for significant inflation increases moving forward. Ng projects that inflation will average around 0.5 percent in both 2025 and 2026.
