Chinese consumers saw a significant decrease in prices last month, according to data released by the National Bureau of Statistics (NBS). The consumer price index (CPI) fell 0.2% from a year earlier in October, more than the 0.1% decrease that had been forecasted. This marks the first time since September that CPI has dropped year-on-year.
Pork prices were a major contributor to the decline, falling by 30.1%, following a 22% drop in September. This is largely due to an oversupply of pigs and weak demand. Core inflation, which excludes food and fuel prices, was up 0.6%, slowing from a 0.8% rise in September.
The producer price index (PPI) also decreased by 2.6% year-on-year in October, compared to a 2.5% drop in September. This marks the 13th consecutive month of decline. Despite the Chinese government’s efforts to stimulate the economy, such as issuing 1 trillion yuan ($137.43 billion) in sovereign bonds, the country is still facing headwinds such as a property crisis, local debt risks and policy divergence with the West.