China's consumer price inflation continued its downward trend in December, with producer prices declining for the 27th consecutive month, despite Beijing's efforts to stimulate domestic demand. According to the National Bureau of Statistics, consumer prices increased by only 0.1% year over year in December, following a 0.2% rise in November.
In contrast, core inflation experienced a slight increase, moving from 0.3% in November to 0.4% in December. Data indicated that food prices fell by 0.5% compared to the previous year, while non-food prices rose by 0.2%.
Month-to-month comparisons showed that consumer prices were stable in December, aligning with predictions. For the entirety of 2024, inflation remained at 0.2%, significantly below the government's target of 3%.
The figures also indicated a continued decrease in producer prices, marking the 27th month of decline in December. Producer prices were 2.3% lower on an annual basis, a slight improvement from a 2.5% decrease in November, meeting market expectations.
Julian Evans-Pritchard, an economist at Capital Economics, attributed the decline in inflation to fluctuations in food prices caused by weather conditions. He noted that the increase in both core inflation and producer price index (PPI) highlights the support that policy stimulus is providing to demand and pricing. However, he cautioned that the impact of such stimulus is likely to be temporary, suggesting that underlying inflation could decline once again later in the year.
