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Explainer | China inflation: 4 takeaways from November’s data as deflationary pressure heightened
- China’s consumer price index (CPI) fell by 0.5 per cent from a year earlier in November, marking the steepest decline since November 2020
- Producer price index (PPI) fell for the 14th month in a row, dropping by 3 per cent in November from a year earlier
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1. Consumer inflation falls deeper into deflationary territory
China’s consumer price index (CPI) fell 0.5 per cent year on year in November, a steeper drop compared to the 0.2 per cent fall in October.
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The year-on-year decline was the sharpest since November 2020.
“CPI fell deeper into deflationary territory last month,” said analysts at Capital Economics.
“The main culprit was a deepening of food price deflation, from minus 4 per cent year on year to minus 4.2 per cent, with food prices falling 0.5 per cent month on month last month after accounting for seasonality.
“In addition, energy prices fell 2.7 per cent month on month, which pushed energy price inflation back into negative territory again.”
2. Factory-gate prices fall for 14th straight month
China’s producer price index (PPI) – which reflects the prices that factories charge wholesalers for products – fell for the 14th straight month in November after falling by 3 per cent, year on year, compared to a 2.6 per cent drop in October.
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