China returned to deflation in October on falling food prices and producer prices continued to decline amid the renewed economic weakness, official data showed Thursday. <\/p>\n
Consumer prices dropped 0.2 percent in October from a year ago after staying flat in September, figures from the National Bureau of Statistics revealed. The rate matched expectations. <\/p>\n
Inflation had turned negative in July and stayed near zero in subsequent months, while Beijing aims to keep inflation around 3 percent in the whole year of 2023.<\/p>\n
Core inflation, which excludes prices of food and energy, eased to 0.6 percent from 0.8 percent in September. <\/p>\n
Food prices declined 4.0 percent from a year ago, while non-food prices gained 0.7 percent. <\/p>\n
The month-on-month fall in overall consumer prices was 0.1 percent compared to an increase of 0.2 percent in September.<\/p>\n
Producer prices declined 2.6 percent annually in October, following a fall of 2.5 percent in September. Prices were forecast to drop 2.8 percent. Prices have been declining over the last 13 months. <\/p>\n
“China is not experiencing “deflation” as most headlines attest,” said ING economist Robert Carnell said. The decline in prices is mainly the result of a supply excess, rather than a collapse in demand.<\/p>\n
Capital Economics’ economists said inflation looks set to remain low for the foreseeable future. <\/p>\n
However, with policy support still on course to drive a modest recovery in growth over the coming quarters, an extended period of deflation is unlikely, they added.<\/p>\n