The latest official economic data from the Chinese Communist Party (CCP) shows that consumer spending continues to be weak. In December 2024, the Consumer Price Index (CPI) rose by 0.1% year-on-year, hitting a nine-month low, with a 0.2% annual increase in CPI for the full year of 2024. Meanwhile, the Producer Price Index (PPI) in December 2024 fell by 2.3% year-on-year, marking the 27th consecutive month of decline, with a 2.2% annual drop in PPI for the entire year of 2024.
On January 9th, the CCP’s National Bureau of Statistics released the CPI and PPI data.
The CPI data for December 2024 showed a 0.1% increase compared to the previous year, a decrease of 0.1% from the previous month, marking the slowest growth rate since April of the same year. In urban areas, prices rose by 0.1%, while in rural areas, they remained stable. Food prices, which had increased by 1.0% the previous month, declined by 0.5%, while non-food prices changed from flat to a 0.2% increase. Consumer goods prices declined by 0.2%, while service prices rose by 0.5%.
For the full year of 2024, the CPI increased by 0.2%.
The Wall Street Journal reported that the slight 0.2% year-on-year increase in CPI in 2024 marked another year of facing downward pressure from inflation, which has undermined business confidence and left policymakers uneasy.
As for the PPI data, in December 2024, it fell by 2.3% year-on-year, marking the 27th consecutive month of decline, although the rate of decline narrowed by 0.2 percentage points compared to the previous month.
In comparison to the same period in 2023, most sectors in December showed a downward trend:
– Prices in industries such as petroleum, coal, and other fuel processing fell by 8.7%
– Prices in petroleum and natural gas extraction industry decreased by 6.2%
– Prices in chemical raw materials and chemical product manufacturing dropped by 4.8%
– Prices in the food processing industry decreased by 4.3%
– Prices in non-metallic mineral products industry fell by 3.0%
– Prices in electrical machinery and equipment manufacturing industry declined by 2.1%
– Prices in computer, communication, and other electronic equipment manufacturing industry dropped by 1.9%
– Prices in electricity, heat production, and supply industry decreased by 0.7%
– Prices in black metal smelting and rolling processing industry fell by 9.5%
– Prices in coal mining and washing industry dropped by 8.0%
– Prices in automobile manufacturing industry decreased by 3.8%, with the rate of decline expanding compared to the previous month.
For the entire year of 2024, the PPI decreased by 2.2% year-on-year, narrowing by 0.8 percentage points compared to the previous year.
According to The Wall Street Journal, many economists had already anticipated the weak economic data from China, expecting moderate consumer inflation in the coming years. With uncertain economic prospects, the long-term downturn in the real estate industry may continue to affect household consumption willingness.