The National Bureau of Statistics of China will announce the latest CPI figures for April on Thursday, according to analysts and data from Trading Economics, China’s inflation rate is anticipated to reach 2.2% at the close of this quarter. Inflation is expected to remain around 2.1% in 2024, then increase slightly to 2.2% percent in 2025, based on long-term projections.
The Consumer Price Index rose 0.7% in March from a year ago, the National Bureau of Statistics said. This was weaker than the 1% forecasted by economists in a Bloomberg survey. Producer Price Inflation worsened to 2.5%, the lowest since June 2020. Core inflation, which excludes volatile food and energy prices, climbed slightly to 0.7% from 0.6%.
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China CPI Data, Source: Trading Economics
Low consumer and producer inflation figures for March indicate that additional fiscal or monetary measures in China may be required to bolster the economy's recuperation.
Despite the ongoing economic recovery post-Covid, there is evidence that domestic demand is still lacking. This provides an opportunity for authorities to implement measures to further support a rebound based on consumption. Throughout the year, CPI has consistently fallen below the target of around 3% set by the government.
The growth of China's services industry in April was below anticipated levels, which further raised worries about the country's economic recovery. This comes after recent data suggested a decline in factory production.
China’s economy experienced its most rapid growth in a year during the first quarter, suggesting that the government may achieve its growth objective for the year without the need for significant stimulus. This development could also serve as a buffer for the global economy against potential downturns.
According to official data released, there was a 4.5% year-on-year increase in GDP last quarter, which was higher than what economists had predicted. Additionally, Retail Sales in March had the most substantial monthly increase since June of the previous year, with a 10.6% surge from the same period a year ago.
According to a statement by Caixin and S&P Global on Friday, the Caixin China Services Purchasing Managers' Index fell to 56.4 in April from 57.8 in March, lower than economists expected median forecast of 57. A reading above 50 indicates an expansion from the previous month, while a reading below 50 indicates a contraction.
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