FX.co ★ China Producer Prices Fall the Most in 4 Months

In March 2025, China's producer prices decreased by 2.5% compared to the previous year, a sharper decline than the 2.3% anticipated by market analysts, following a 2.2% drop in February. This represents the most significant decrease since November 2024, underscoring persistent weak domestic demand within China, despite ongoing government efforts to stimulate the economy. The cost of production materials saw an accelerated decline (-2.8% compared to -2.5% in February), with notable decreases in the mining sector (-8.3% against -6.3%) and raw material prices (-2.4% compared to -1.5%). Processing costs continued their downward trend, albeit at a slightly reduced rate (-2.6% as opposed to -2.7%). Consumer goods prices fell more rapidly (-1.5% against -1.2%), driven by substantial declines in clothing (-0.3% versus -0.2%) and durable goods (-3.4% compared to -2.5%), while food prices dropped (-1.4% against -1.6%) and the increase in daily-use goods prices slowed (0.7% compared to 0.9%). On a month-to-month basis, producer prices decreased by 0.4% after a 0.1% decline in February. During the first quarter of 2025, factory-gate prices fell by 2.3%. In 2024, producer prices experienced a decline of 2.2%.