China’s consumer inflation accelerated in November to the highest level in nearly two years while producer price deflation worsened, underscoring the challenge policymakers face in reviving domestic demand amid persistent trade tensions.
Consumer prices edged up 0.7% from a year earlier, its highest level since February last year, National Bureau of Statistics data showed Wednesday. The increase followed a 0.2% rise in October and matched the 0.7% gain expected in a Reuters poll of economists.
Factory-gate prices fell 2.2% in November from a year earlier, missing the forecast of a 2% decline and extending the deflationary stretch into its fourth year. That was compared with a 2.1% fall in October.
Economists warned that deflationary pressure on the world’s second-largest economy will persist into next year as the protracted housing downturn and weak labour market conditions continue to weigh on household spending, calling for fresh policy measures to spur demand.
While the economy slowed to its weakest level in a year in the third quarter, it appears to be on track to reach Beijing’s annual growth target of “around 5%” this year, supported by the resilient exports as manufacturers ramped up shipments to non-U.S. markets.
