Connect with us

Hi, what are you looking for?

Economy

China economy: Is the latest stimulus enough to generate inflation?

Investing.com — Recent economic data from China indicates that the country’s inflation remains subdued despite new stimulus measures aimed at boosting demand.

As per Citi Research, October’s Consumer Price Index rose 0.3% year-on-year, meeting their forecast but falling below the market expectation of 0.4%.

The Producer Price Index contracted by 2.9% year-on-year, a sharper decline than anticipated.

Both metrics underline a broader challenge in igniting inflation through the current stimulus package.

CPI figures show broad-based weakness, with food prices falling 1.2% month-on-month due to easing supply conditions. The drop was particularly pronounced in key staples like pork and vegetables.

Energy prices also declined, reflecting volatility in global oil markets. Core inflation, which excludes food and energy, showed only a slight recovery, flagging persistent softness in domestic demand.

On the producer side, the PPI decline was driven by lower global commodity prices, compounded by weak end-consumer demand.

While construction-related prices saw some gains due to targeted stimulus in infrastructure, other sectors, particularly durable goods, continued to see price contractions.

Citi Research notes that the government’s current stimulus measures, including fiscal risk resolution and trade-in initiatives, have had mixed effects.

These efforts may improve liquidity and support specific sectors, but their impact on broader aggregate demand remains limited.

The trade-in programs, designed to boost consumer spending, may inadvertently contribute to deflationary pressures by pushing prices lower through subsidies and discounts.

Going forward, Citi Research suggests that more robust domestic demand policies may be necessary to counter deflationary trends.

The upcoming Central Economic Work Conference in December could provide a platform for discussing more decisive measures.

As external risks, including potential trade tensions, persist, China’s policymakers might need to enhance fiscal and monetary responses to achieve a sustainable reflationary path.

This post appeared first on investing.com

You May Also Like

Investing

Fisker (NYSE: FSR) stock price has been one of the best-performing electric vehicle (EV) stocks this week even as Tesla slumped. The shares jumped...

Investing

Newmont (NYSE: NEM) reported mixed financial results even as the price of gold approached its all-time high. In all, the company’s earnings per share...

Investing

The Fox Corporation (NASDAQ: FOX) stock price has been under pressure as investors come to terms with the abrupt firing of Tucker Carlson. The...

Investing

NatWest (LON: NWG) share price rose sharply, helped by the strong results from Barclays. The stock jumped to a high of 274.8p, which was...




Disclaimer: Oldamericanbroker.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the-company.


Copyright © 2024 Oldamericanbroker.com