Deflationary Trend Persists in Chinese Economy as Consumer and Producer Prices Continue to Fall

Beijing: The National Bureau of Statistics of China (NBS) has released the latest figures on the country's price indexes, revealing a continued deflationary trend in both consumer and producer prices for May 2025. According to Anadolu Agency, the Consumer Price Index (CPI) experienced a 0.1% decline compared to the same period last year, while the Producer Price Index (PPI) saw a sharper decrease of 3.3%. This ongoing downward trajectory in prices is contributing to persistent deflationary pressures within the Chinese economy. The data shows that consumer prices dropped by 0.1% on a year-on-year basis in May, with core inflation, which excludes volatile food and energy prices, rising by 0.6%. Food prices themselves saw a modest increase of 0.4%, whereas non-food prices remained static. Meanwhile, prices for consumer products fell by 0.5%, contrasted by a 0.5% rise in service prices. Since March 2023, the CPI has been consistently below the 1% mark, raising ongoing concerns about deflation. In response to these concerns, the Chinese government has adjusted its inflation target, reducing it from the long-standing 3% since 2004 to 2% for the current year. The PPI's decline, which began in the fourth quarter of 2022, has continued through 2023 and 2024, with a recorded fall of 3% in 2023 and 2.2% in 2024. The downward trend observed in May 2025 suggests that these deflationary pressures remain entrenched in China's economic landscape.