China Sees Third Consecutive Month of Consumer Price Growth, Indicating Demand Rebound

Consumer prices in China continued their upward trajectory for the third consecutive month in April, signaling a resurgence in domestic demand amidst efforts to stabilize the nation’s economy. The latest figures, released by the National Bureau of Statistics, revealed a 0.3% increase in consumer prices year-on-year, surpassing both March’s 0.1% uptick and analysts’ projections of a 0.2% rise. Core inflation, excluding volatile food and energy costs, also showed improvement, growing by 0.7% compared to 0.6% in March. This positive trend in consumer inflation underscores a revitalization of demand, particularly in the services sector, according to Xu Tianchen, a senior economist at the Economist Intelligence Unit. Despite these encouraging signs, challenges persist, with cooling factory and services activities and an ongoing housing crisis posing hurdles to sustained economic recovery. Rising utility prices and fiscal strains at the local government level add further complexities to the economic landscape, prompting policymakers to adopt flexible and targeted monetary measures to bolster growth. The producer price index (PPI) registered a 2.5% decline in April year-on-year, indicative of continued pressures on the industrial manufacturing sector. Against this backdrop, China’s central bank and policymakers are striving to stimulate effective demand and consumption scenarios, aiming to achieve the nation’s economic growth target of approximately 5% for 2024 amidst lingering uncertainties.