China’s consumer price index (CPI), a key gauge of inflation, rose by 0.7% year-on-year in March, marking the slowest pace since September 2021, according to official data released on Thursday by the National Bureau of Statistics (NBS). This moderate increase suggests a period of easing inflationary pressures in the world’s second-largest economy.
The slowdown in CPI growth was attributed to a decline in food prices and subdued consumer demand. Food prices increased by 2.4% year-on-year, down from the 2.6% rise in February, with pork prices—a staple in Chinese diets—dropping by 3.1%. Non-food prices saw a modest increase of 0.3%.
Analysts believe that the softer inflation data provides room for policymakers to introduce measures to stimulate economic growth if necessary. “The cooling inflation reflects weaker domestic demand, and authorities may consider policies to boost consumption,” said a senior economist at a leading financial institution.
Meanwhile, China’s producer price index (PPI), which measures costs for goods at the factory gate, fell by 2.5% year-on-year in March, deeper than the 1.4% decline in February. The drop in PPI indicates lingering pressures on industrial profits and suggests that upstream industries are experiencing deflation.
The combination of slowing consumer inflation and declining producer prices highlights the complex economic challenges China faces amid global uncertainties. Economists will be watching upcoming data releases closely to assess the trajectory of the economy and the potential need for policy adjustments.
