China's consumer price index (CPI) fell 0.1% year-on-year in May, marking the fourth consecutive month of deflation. This occurred despite a temporary rise in spending during national holidays.
The persistent deflation is attributed to weak domestic demand and intensified price wars. Factory deflation also continued for the 32nd month, with producer prices experiencing their sharpest decline in almost two years.
The prolonged deflation signals ongoing challenges for the Chinese economy. The inability of holiday spending boosts to offset the larger trend highlights the severity of the underlying issues.
China’s consumer deflation extended into a fourth month, as price wars intensified while a spending boost during two national holidays failed to offset the drag from weak domestic demand.
The consumer-price index fell 0.1% in May from a year earlier, the National Bureau of Statistics said Monday. Factory deflation persisted into a 32nd month, with producer prices falling the most in nearly two years.
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