China's consumer inflation slowed to a four-month low in October while producer price deflation worsened, despite new stimulus efforts from Beijing aimed at stabilising the economy.
Data on Saturday revealed that the country’s consumer price index (CPI) rose 0.3% in October from the previous year, down from a 0.4% increase in September and below the 0.4% expected.
This marks the lowest rise since June, according to the National Bureau of Statistics. Core inflation, which excludes food and fuel, saw a modest increase of 0.2%, up from September’s 0.1%.
Market participants remain cautious about the immediate impact of China’s latest support measures, including a 10 trillion yuan (A$2.11 trillion) debt-relief package approved on Friday.
This measure, passed by China’s top legislative body, the National People’s Congress, aims to address “hidden debt” issues at the local government level but stops short of direct economic injection, tempering expectations of a more aggressive stimulus.
The latest stimulus package fell short of investors’ hopes for significant fiscal measures to boost consumption and economic growth. Finance Minister Lan Foan hinted at additional support, signalling upcoming tax incentives for the housing sector and a bank recapitalisation plan.
Meanwhile, the producer price index (PPI) fell 2.9% year-on-year in October, extending the 2.8% drop from September and exceeding the expected 2.5% decline. Factory prices saw deeper deflation in sectors such as petroleum, natural gas, and automotive manufacturing.