BEIJING: Deflation in China accelerated in November, official data showed on Saturday, underlining the difficulties the world’s second-largest economy faces in reviving slowing demand.

The figures came after President Xi Jinping said on Friday that the Asian giant’s post-pandemic recovery was “still at a critical stage” and warned of “increasing adverse factors in the international political and economic environment”.

The consumer price index, the main gauge of inflation, fell 0.5 per cent year-on-year, according to the National Bureau of Statistics (NBS).

NBS official Dong Lijuan said in a statement that the decline was linked to “downward fluctuations in the prices of energy and food”.

The corresponding figure for October was a decline of 0.2pc.

While deflation suggests goods were cheaper, it poses a threat to the broader economy as consumers tend to postpone purchases in the hopes of further reductions.

A lack of demand can then force companies to cut production, freeze hiring or lay off workers, while potentially also having to discount existing stocks – dampening profitability even as costs remain the same.

The NBS also said producer prices sank for the 14th consecutive month, sliding 3pc year-on-year compared to 2.6pc the previous month.

Dong attributed the decline to “a rebound in international oil prices which weakened demand for some industrial goods”.

China’s economy grew a modest 4.9pc in the third quarter, slightly below Beijing’s annual target of around 5pc, which is one of its lowest in years.

Xi urged measures to boost the economy at a meeting of the ruling Communist Party’s Politburo, state broadcaster CCTV reported Friday.

“It is necessary to focus on accelerating the construction of a modern industrial system, expand domestic demand, (and) prevent and defuse risks,” he said.

Published in Dawn, December 10th, 2023

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

At breaking point
Updated 20 Jan, 2025

At breaking point

The country’s jails serve as monuments to bureaucratic paralysis rather than justice.
Lower growth
20 Jan, 2025

Lower growth

THE IMF has slightly marked down its previous growth forecast for Pakistan’s economy from 3.2pc to 3pc for the...
Nutrition challenge
20 Jan, 2025

Nutrition challenge

WHEN a country’s children go hungry, its future withers. In Pakistan, where over 40pc of children under five are...
Kurram conundrum
Updated 19 Jan, 2025

Kurram conundrum

If terrorists and sectarian groups — regardless of their confessional affiliations — had been neutralised earlier, we would not be at this juncture today.
EV policy
19 Jan, 2025

EV policy

IT is pleasantly surprising that the authorities are moving with such purpose to potentially revolutionise...
Varsity woes
19 Jan, 2025

Varsity woes

GIVEN that most bureaucrats in our country are not really known for contributions to pedagogical excellence, it ...