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The consumer price index (CPI) shed 0.3% in December from a
year earlier, and was up 0.1% month-on-month, data from the National Bureau of
Statistics (NBS) showed on Friday. November's index dropped 0.5% in annual and
monthly terms.
Economists polled by Reuters forecast a 0.4% fall in
consumer prices year-on-year and a 0.2% gain month-on-month.
NBS said pork prices, the main factor impacting year-on-year
CPI, fell 26.1%, narrowing the rate of decline by 5.7 percentage points.
Services inflation, however, rose steadily with tourism and
hotel accommodation prices increasing by 6.8% and 5.5%, respectively.
The producer price index (PPI) tumbled 2.7% after a 3% fall
in November, marking the 15th straight month of declines. Analysts had expected
a 2.6% slide in December.
The latest data underscores the broader weakness in demand
across the economy, keeping policymakers alert to any entrenched expectations
of price falls. China's central bank has pledged to step up macroeconomic
policy adjustments to support the economy and drive a rebound in prices.
With a protracted housing downturn, a soft job market and
other headwinds such as debt risks dampening growth prospects, consumers in the
world's second largest economy have been tightening their purse strings.
Full-year CPI rose 0.2%, missing the official target of
around 3% for last year. That suggests the actual inflation undershot annual
targets for the 12 straight year.
China's economic recovery remains patchy even as some data
have shown a positive turn. Private-sector survey findings of faster growth in
factory and services activities in December contrasted with shrinking gauges in
official readings, keeping stimulus calls alive in the new year.
The People's Bank of China (PBOC), which lifted policy bank
loans at the end of last year through its pledged supplementary lending (PSL)
facility, has fuelled expectations of increased support for the country's
ailing housing sector.
Earlier this week, state media quoted Zou Lan, head of the
PBOC's monetary policy department, as saying the central bank will use policy
tools including reserve requirements to support credit growth.
China unveiled plans in October to issue 1 trillion yuan
($139.39 billion) in sovereign bonds to fund investment projects, and has
pledged to implement proactive fiscal policy in 2024, reinforcing market views
that fiscal spending is likely to do the heavy lifting to revive the economy. -Reuters