China deepens its deflation with the biggest drop in the CPI since 2009

MADRID, 8 Feb. (EUROPA PRESS) -

Last January, China's consumer price index (CPI) recorded a year-on-year drop of 0.8%, the largest drop in prices since September 2009 and representing the fourth consecutive drop in the inflation rate in the country. country, according to data published this Thursday by the National Statistics Office (ONE).

The contraction of prices in China in the month of January was mainly due to the 5.9% decrease in food prices, after the 3.7% drop in December.

For its part, China's core inflation rate, which excludes food and energy due to its greater volatility, fell to 0.4% in January from 0.6% the previous month, its lowest level in seven months.

On the other hand, the National Statistics Office has reported that industrial production prices in China fell by 2.5% annually in January, compared to a drop of 2.7% in December.

"This was largely due to the usual volatility in food and tourism prices around Chinese New Year," said Julian Evans-Pritchard, chief China economist at Capital Economics.

"Looking ahead, we expect that the attenuation of food price deflation will raise inflation to positive territory in the coming months. But underlying inflation will probably remain low," said the expert, anticipating that the CPI will average 0.5% in 2024, compared to 0.2% in 2023.