China CPI inflation slows more than expected in October


By Ambar Warrick– Chinese consumer inflation slowed more than expected in October, data showed on Wednesday, as renewed lockdown measures during the month, following a resurgence in COVID-19 cases, added fresh headwinds to the economy.

The (CPI) rose 2.1% year-on-year in October, below expectations of 2.4% and well below September’s 2.8%, data from the National Bureau of Statistics shows. Month-on-month it rose just under 0.1%, below expectations for growth of 0.3%.

Factory inflation, down 1.3% in the month, exceeded estimates for a 1.5% decline. But the figure turned negative for the first time in a year.

China is facing cooling off prices as a slew of COVID-related lockdowns have brought economic activity to a standstill this year. Factory inflation in particular has suffered the most, as several manufacturing hubs were temporarily closed due to COVID measures.

The country is now grappling with the worst COVID-19 outbreak since May, which has led to the recovery of curbs at several major hubs, including the economic capital of Shanghai.

The weak inflation data also shows that the stimulus from the Chinese government is not yet affecting economic growth.

Although the Chinese economy still grew less than forecast by the People’s Bank of China in the third quarter.

Despite the economic slowdown caused by COVID-19 lockdowns, the Chinese government has so far given no indication that it plans to roll back the controversial policy. While reports last week suggested the government is considering easing some measures, Beijing has so far not set a clear timeline for the move.

A brewing real estate crisis also put a dent in Chinese economic activity this year, as several major real estate developers faced a cash shortage and construction activities were suspended. The crisis has also made consumers reluctant to buy houses and take out mortgages.

It weakened after Wednesday’s data, falling 0.3%.

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