Modification de China s Consumer Prices Back In Decline As Recovery Wobbles

Oct CPI -0.2% y/y vs 0.0% in Sep<br><br>*<br><br>Oct CPI -0.1% m/m vs +0.2% in Sep<br><br>*<br><br>Oct PPI -2.6% y/y vs -2.5% in Sep<br><br>(Adds milestones for CPI, link to graphic on price trends)<br><br>By Liangping Gao and Ryan Woo<br><br>BEIJING, Nov 9 (Reuters) - China's consumer prices swung lower in October, as key gauges of domestic demand pointed to weakness not seen since the pandemic, while factory-gate deflation deepened, casting doubts over the chances of a [https://www.biggerpockets.com/search?utf8=%E2%9C%93&term=broad-based%20economic broad-based economic] recovery.<br><br>The consumer price index (CPI) dropped 0.2% in October from a year earlier and slipped 0.1% from September, data from the National Bureau of Statistics (NBS) showed on Thursday.<br><br>The declines undershot the median 0.1% year-on-year fall and flat month-on-month reading predicted in a Reuters poll. Both indicators were last negative at the same time in November 2020 during the COVID-19 pandemic.<br><br>The headline figure was dragged by a further slump in pork prices, [https://xaydungtrangtrinoithat.com/cong-ty-xay-dung-tai-ba-ria-vung-tau/ công ty xây dựng phú mỹ] down 30.1%, speeding up from a 22% slide in September, amid an oversupply of pigs and weak demand.<br><br>However, even core inflation, which excludes food and fuel prices, slowed to 0.6% in October from 0.8% in September, pointing to China's continued battle with disinflationary forces and the risk of again missing the government's full-year headline inflation target, set at around 3%.<br><br>Consumer prices slipped into deflation in July and returned to positive territory in August but were flat in September. Factory deflation persisted for the 13th straight month in October.<br><br>Combined with other economic indicators, the data in the fourth-quarter so far suggests a meaningful recovery in the world's second-largest economy remains elusive.<br><br>"The data shows combating persistent disinflation amid weak demand remains a challenge for Chinese policymakers," said Bruce Pang, chief economist at Jones Lang Lasalle.<br><br>"An appropriate policy mix and more supportive measures are needed to prevent the economy from a downward drift in inflation expectations that could threaten business confidence and household spending."<br><br>Month-on-month, CPI fell 0.1%, compared with a 0.2% gain in September.<br><br>The producer price index (PPI) fell 2.6% year-on-year against a 2.5% drop in September. Economists had predicted a 2.7% fall in October.<br><br>Authorities have repeatedly downplayed the risks.<br><br>"There is no deflation in China and there will be no deflation in the future," said a statistics bureau official in August.<br><br>Beijing has been ramping up measures to support the broader economy, including 1 trillion yuan ($137.43 billion) in sovereign bond issuance and a move to allow local governments to frontload part of their 2024 bond quotas.<br><br>But a property crisis, local debt risks and policy divergence with the West all complicate the recovery process.<br><br>Recent indicators of the economy have been mixed.<br><br>China's imports unexpectedly grew in October while exports contracted at a quicker pace. Meanwhile, the official purchasing managers' index showed factory activity unexpectedly contracting and services activity slowing last month.<br><br>China also recorded its first-ever quarterly deficit in foreign direct investment (FDI), underlining capital outflow pressure following Western governments' "de-risking" moves.<br><br>"We expect China's economy to grow by 5.0% in 2023, in accordance with the target set by authorities, followed by 4.0% growth in 2024 and 2025," said Moody's on Thursday.<br><br>"However, we see downside risks to China's trend growth on account of structural factors."<br><br>(Reporting Liangping Gao, Ella Cao and Ryan Woo; Editing by Sam Holmes)