China's March CPI Falls 0.1%... Declines for Second Consecutive Month

China's consumer price index (CPI) last month fell by 0.1% compared to the same month last year, continuing a decline for the second consecutive month.

According to the National Bureau of Statistics of China on the 10th, the March CPI growth rate decreased by 0.1% year-on-year. Although the decline was smaller than in February (-0.7%), it fell short of the Reuters surveyed experts' forecast of a stable trend. It matched the Wall Street Journal (WSJ) experts' forecast.

A panoramic view of Yangtze Port in Nanjing, Jiangsu Province, China. Photo by AP Yonhap News.

원본보기 아이콘

Compared to the previous month, it fell by 0.4%, a larger decline than February's (-0.2%). This was below the Reuters forecast (-0.3%).

China's CPI growth rate (year-on-year) has slowed since recording 0.6% in August last year. It was 0.5% in January this year, influenced by consecutive domestic demand stimulation policies and the Lunar New Year (Chunje).

The producer price index (PPI) in March fell by 2.5% year-on-year, continuing a decline for 30 consecutive months. This was the largest contraction since November 2024. This exceeded the Reuters forecast (-2.3%). On a month-on-month basis, it fell by 0.4%.

Dong Lijun, chief statistician at the National Bureau of Statistics, explained, "The month-on-month decline in CPI was mainly influenced by seasonal factors and falling oil prices. As the weather warmed, fresh food was supplied in large quantities," adding, "The off-season for travel led to a decrease in the number of tourists and a drop in travel-related prices." He further noted, "The effects of policies stimulating consumer demand are gradually appearing."

Julian Evans-Pritchard, China economist at Capital Economics, said, "Deflationary pressures continued last month, and it is becoming increasingly difficult for Chinese companies to export excess supply, which is very likely to intensify over the next few quarters." He pointed out the 0.5% year-on-year rise in core inflation (excluding food and energy) last month as a positive change but added that falling energy prices offset this increase.

The market is paying attention to the economic stimulus measures that Chinese authorities may introduce to ease the tariff burden imposed by the United States. Jiwei Zhang, chief economist at Pinpoint Asset Management, predicted that the Chinese government is likely to inject fiscal resources after trade data is released next week. He also anticipated that the timing and scope of stimulus measures will be decided at the Politburo meeting at the end of this month.

Earlier, Premier Li Chang of the State Council of China chaired a discussion with economic experts and entrepreneurs the day before. Premier Li stated, "We must clearly recognize that external shocks are exerting certain pressures on the stable operation of our country's economy," and suggested the introduction of stimulus measures by saying, "We have sufficiently anticipated this and are prepared to respond to various uncertainties."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.