The first time in a year that China's retail inflation goes negative

Despite being distorted by seasonal factors, China's consumer inflation fell below zero for the first time in 13 months, serving as a reminder of the economy's ongoing deflationary forces. The National Bureau of Statistics said on Sunday that the consumer price index fell 0.7% from a year ago after increasing 0.5% the month before. Bloomberg polled economists, and their median prediction was a 0.4% decline.

For the second time in more than 15 years, China's core CPI, which does not include volatile goods like food and energy, fell by 0.1%, marking the first decline since 2021. Deflation in factories continued into the 29th month. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, stated that deflationary pressures are still present in China's economy. "Domestic demand is still low."

According to the statistics agency, one of the main reasons for the drop in inflation was the impact of a high base from the previous year, which was brought about by higher prices as a result of Lunar New Year expenditures.