China’s consumer inflation slowed in November to a five-month low, while producer price deflation persisted even despite the economy receiving support from recent stimulus efforts. China’s consumer price index rose 0.2 percent year-on-year last month, declining from a 0.3 percent increase in October, data from the National Bureau of Statistics showed on Monday.
On average from January to November, the national consumer price index showed a 0.3 percent increase compared with the same period of the previous year. Month-on-month, the index decreased by 0.6 percent in November, with urban and rural areas both seeing a decline of 0.6 percent.
Producer price deflation slows
Food prices also dropped by 2.7 percent from the previous month, while non-food prices dipped by 0.1 percent. Consumer goods prices slid by 0.7 percent month-on-month while service prices saw a decline of 0.3 percent, said the NBS.
China’s core inflation rose and producer price index deflation eased, suggesting that stimulus measures are supporting underlying price pressures to some extent. Core inflation, excluding volatile food and fuel prices, edged up to 0.3 percent last month from 0.2 percent in October. Meanwhile, the producer price index fell 2.5 percent year-on-year in November, a slower decline than the 2.9 percent in October.
China’s economy to grow 4.3 percent in 2025
Beijing unveiled a 10 trillion yuan ($1.37 trillion) debt package in November to ease local government financing strains. Chinese government advisors are calling for an economic growth target of around 5 percent for 2025, supporting stronger fiscal stimulus to mitigate the impact of expected U.S. tariff hikes on the country’s exports. However, economists are still uncertain about China’s economic prospects if the country faces new trade tariffs from the Trump presidency next year in light of its struggling property sector.
Fitch Ratings lowered its economic forecasts for China for 2025 to 4.3 percent from 4.5 percent and for 2026 to 4 percent from 4.3 percent on Monday, citing risks of even higher U.S. tariffs on Chinese goods and ongoing challenges in the real estate sector. Fitch also assumes that the effective tariff rate on U.S. imports from China will substantially increase, from around 10 percent to approximately 35 percent, adding another layer of complexity to China’s economic outlook.
Read: U.S. economic growth unrevised at 2.8 percent in Q3 2024
Stimulus measuresÂ
Top leaders in the country are set to convene at the annual Central Economic Work Conference starting Wednesday to outline economic goals and stimulus measures for 2025. Chinese officials have increased stimulus measures since late September, including several interest rate cuts, easier property purchase rules and liquidity support for stock markets. The existing stimulus measures have worked to lift some aspects of the economy but were still not enough to offset persistent deflationary pressures.
China is also due to report its trade data for November on Tuesday and retail sales figures next Monday, offering more insights into the country’s economic outlook.
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