China’s weak economic activity highlighted by slowing inflation, fall in factory-gate prices

China’s consumer inflation rose by 1.6 per cent in November from a year earlier, while producer prices fell by 1.3 per cent, unchanged from October

Experts warn that economic activity is likely to remain depressed in China until the second half of next year, despite easing coronavirus rules

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China’s producer price index (PPI), which reflects the prices that factories charge wholesalers for products, fell by 1.3 per cent in November, unchanged from October. Photo: AFP

Published: 9:39am, 9 Dec 2022Updated: 4:52pm, 9 Dec 2022

China’s consumer price growth fell to its lowest level in eight months in November, while factory-gate prices contracted for a second consecutive month, highlighting weak momentum in the world’s No 2 economy.

Lower food prices saw China’s consumer price index (CPI) rise by 1.6 per cent in November from a year earlier, in line with expectations and down from 2.1 per cent growth in October, according to the National Bureau of Statistics (NBS).

Fuel price inflation also continued to ease due to base effects, according to Capital Economics, keeping the CPI well within Beijing’s target of “around 3 per cent” for the year.

The producer price index (PPI), which reflects the prices that factories charge wholesalers for products, remained unchanged from October and fell by a better-than-expected 1.3 per cent in November, year on year.

The outlook for the second half of 2023 brightens, as the transition period becomes more volatile but shorter

Zhang Zhiwei

“The data suggests economic momentum continued to weaken. The Politburo meeting [this week] identified weak confidence as a major problem for the economy,” said Zhang Zhiwei, chief Economist at Pinpoint Asset Management.