Consumer prices in China fall fastest in 3 years

BEIJING, Dec 9 (Reuters): China's consumer prices fell the fastest in three years in November while factory-gate deflation deepened, indicating rising deflationary pressures as weak domestic demand casts doubt over the economic recovery.
The consumer price index (CPI) dropped 0.5 per cent both from a year earlier and compared with October, data from the National Bureau of Statistics (NBS) showed on Saturday.
That was deeper than the median forecasts in a Reuters poll of 0.1 per cent declines both year-on-year and month-on-month. The year-on-year CPI decline was the steepest since November 2020.
The numbers add to recent mixed trade data and manufacturing surveys that have kept alive calls for further policy support to shore up growth.
Xu Tianchen, senior economist at the Economist Intelligence Unit, said the data would be alarming for policymakers and cited three main factors behind it: falling global energy prices, the fading of the winter travel boom and a chronic supply glut.
"Downward pressure will continue to rise in 2024 as developers and local governments continue to deleverage and as global growth is expected to slow," Xu said.
Year-on-year core inflation, excluding food and fuel prices, was 0.6 per cent, the same as October.
Bruce Pang, chief economist at Jones Lang Lasalle, said the weak core CPI reading was a warning about persistently sluggish demand, which should be a policy priority for China.