China's consumer prices climb in May amid ongoing factory deflation

Posted on June 17, 2024   |  

In May, China's consumer prices increased by 0.3%, marking the fourth month of continuous positive growth after a significant deflation period.

Factory-gate prices continued to deflate, with the producer price index decreasing by 1.4% year-on-year in May, which was slightly better than the anticipated 1.5% decline.

The Chinese government is having difficulty boosting household spending due to a prolonged real estate downturn and a weak job market.

Declining producer prices are reducing company profits, leading to hesitation in investing.

Consumers may further reduce their spending in anticipation of future price decreases.

Recently, China's economy experienced its longest deflation period since the Global Financial Crisis, attributed to weak domestic demand even after reopening post-COVID-19.