China's consumer price index (CPI) in February rose 1.3%, exceeding economists' expectations and marking the strongest expansion in over three years.
March 9, 2569 at 09.48:XNUMX a.m., CNBC reported that China's consumer inflation rose to its highest level in over three years. Following holiday spending which boosted consumption, deflation at factory prices began to slow down.
National Bureau of Statistics of China (NBS) Revealed on Monday that The consumer price index (CPI) in February rose 1.3% year-on-year, exceeding economists' expectations of 0.8% in a Reuters survey and a significant increase from January's 0.2% growth. This marks the strongest inflation recovery since January 2566, according to LSEG data. Compared to the previous month, the CPI increased 1%, higher than economists' forecast of 0.5%, reflecting a clear recovery in consumer spending during the holiday season.
Meanwhile, the Producer Price Index (PPI), which reflects factory-level prices, fell 0.9% year-on-year, better than economists' expectations of a 1.2% decline and an improvement from January's 1.4% drop, indicating a slight easing of deflation in the manufacturing sector.
At a key economic policy meeting last week, the Chinese government maintained its consumer inflation target at around 2% for 2569, the lowest level in over 20 years, after initially implementing the target in 2568. Policymakers aim to stimulate domestic demand and curb fierce price competition across several industries.
however China's inflation target is often viewed as a ceiling rather than a level it needs to reach. By 2568, overall consumer prices are expected to remain virtually unchanged, while core inflation, which excludes food and energy prices, will rise by only 0.7%, reflecting continued weak consumer confidence.
Meanwhile, the Chinese government has also lowered its GDP growth target for this year to a range of 4.5–5%, the lowest target since the early 1990s, as Chinese officials acknowledge that the country continues to face deflationary pressures and increased geopolitical uncertainty.
To stimulate domestic spending, the Chinese government has allocated 250,000 billion yuan, or approximately $36,200 billion, this year to support consumer trade-in programs, although this is a decrease from 300,000 billion yuan allocated for 2568. Additionally, a 100,000 billion yuan government fund has been established to support private investment and consumption.
However, economists believe that China's economic stimulus measures will be implemented gradually. Larry Hu, chief China economist at Macquarie. specify that Although policymakers view weak consumption as a structural problem, the need for large-scale consumption stimulus measures is not yet high, as the economy is still supported by exports and manufacturing.
Hu stated that: "The key variable is the export sector." If exports remain strong, the Chinese government may still tolerate weak domestic consumption. However, if exports slow down, authorities may increase domestic stimulus measures to maintain GDP growth targets.
refer : www.cnbc.com
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