2024.01.1208:05:00UTC+00Deflation Persists In China; Exports Rise

Consumer prices in China fell for the third straight month in December highlighting the risk of deflation, while exports expanded more than expected despite the weak global trade.

The consumer price index, or CPI, dropped 0.3 percent annually after a 0.5 percent decline in November, the National Bureau of Statistics said Friday. This was the third consecutive fall.

Separate data showed that producer prices continued to decline in December. Producer prices decreased 2.7 percent from the previous year, following a 3.0 percent decrease in November. Concerns about low inflation is likely to linger for a while, leading policymakers to err in favor of keeping the policy stance supportive in the near-term, economists at Capital Economics said.

The Customs Office reported that exports increased 2.3 percent from a year ago, better than November's 0.5 percent increase. Shipments were forecast to grow moderately by 1.7 percent.

Imports grew 0.2 percent annually, in contrast to the 0.6 percent decrease and also economists' forecast of 0.3 percent increase. As a result, the trade surplus increased to $75.3 billion from $68.3 billion in the previous month. This was also above forecast of $74.75 billion.

In the whole year 2023, shipments decreased for the first time in seven months. Exports decreased 4.6 percent and imports fell 5.5 percent annually.

Earlier this week, the World Bank said the global trade growth in 2024 is likely to be only half the average in the decade before the pandemic.

The Washington-based lender forecast global growth to slow for the third year in a row, to 2.4 percent in this year from 2.6 percent last year.

".the global economy is set to rack up a sorry record by the end of 2024 - the slowest half-decade of GDP growth in 30 years," the World Bank said.

The National Bureau of Statistics is set to publish China's GDP data on January 17.