China’s CPI declines by 0.8% Y-Y, largest drop since 2009

China’s consumer price index (CPI) fell by 0.8 per cent year-on-year in January, the steepest since September 2009, Reuters reported on Thursday.

The country’s economy has been dealing with a slowdown in prices since early last year. This has led policymakers to lower interest rates in order to stimulate growth, while many developed economies have been focused on controlling high inflation.

Economists warn that the deflationary pressure could become entrenched in consumer behaviour. The thing that urges policymakers to take quick action to avoid deflationary risks.

The core CPI, which excludes food and energy prices, went up 0.4 per cent year-on-year in January 2024. While, China’s producer price index (PPI), which measures costs for goods at the factory gate, went down 2.5 per cent year-on-year last month, Xinhua reported.