Chinese consumer inflation slows despite stimulus efforts

The consumer price index rose 0.2% from a year earlier, following a 0.3% gain in October, the National Bureau of Statistics said Monday. The median forecast was for a 0.4% increase.

Factory deflation extended into a 26th straight month, with the producer price index registering a 2.5% decline — slower than the 2.9% drop in October.

China’s economy has struggled to break out of deflation, with consumption growth still far below its pre-pandemic levels. The slowdown has prompted the government and the central bank to start rolling out stimulus measures from late September.

Falling prices are still eroding corporate earnings while households remain unwilling to spend. But signs have emerged that deflationary pressures are beginning to ease.

A private survey of manufacturing, released this month by Caixin and S&P Global, found that gains in both input costs and output prices accelerated in November. Output price inflation reached a 13-month high.

There was also an improvement in retail sales in October, partly driven by the long holiday that boosted private consumption. Data on industrial output, retail and investment due next week will show whether that continued into November.