Official data raise spectre of deflation in wake of Covid-19 pandemic
Weaker pork prices helped push China’s consumer price inflation to its lowest level in 11 years, adding to concerns over the strength of household spending in the country’s recovery from the coronavirus pandemic.
The consumer price index rose 0.5 per cent year-on-year in October, official data show, lower than economists’ expectations of 0.8 per cent. That compared to a 1.7 per cent rise in September and 2.4 per cent in August.
A decline in headline Chinese inflation has been mainly driven by food prices, which rose sharply over the summer after flooding across the country restricted supply. Prices increased just 2.2 per cent in October.
Pork prices, a crucial input in the country’s basket of goods, fell 2.8 per cent in October in their first year-on-year drop since March 2019. Prices in the world’s biggest producer and consumer of pork were up more than 100 per cent in the first half of the year due to African swine fever.