China's consumer prices back in decline

BEIJING, Nov 09 (Reuters): China's consumer prices swung lower in October, as key gauges of domestic demand pointed to weakness not seen since the pandemic, while factory-gate deflation deepened, casting doubts over the chances of a broad-based economic recovery.

The consumer price index (CPI) dropped 0.2 per cent in October from a year earlier and slipped 0.1 per cent from September, data from the National Bureau of Statistics (NBS) showed on Thursday.

The declines undershot the median 0.1 per cent year-on-year fall and flat month-on-month reading predicted in a Reuters poll. Both indicators were last negative at the same time in November 2020 during the Covid-19 pandemic.

The headline figure was dragged by a further slump in pork prices, down 30.1 per cent, speeding up from a 22 per cent slide in September, amid an oversupply of pigs and weak demand.

However, even core inflation, which excludes food and fuel prices, slowed to 0.6 per cent in October from 0.8 per cent in September, pointing to China's continued battle with disinflationary forces and the risk of again missing the government's full-year headline inflation target, set at around 3 per cent.