In October 2024, China’s September CPI and PPI both performed below market expectations, reflecting the ongoing issue of insufficient domestic demand.
The Chinese National Bureau of Statistics announced on its official website on October 13 that the year-on-year increase in September CPI was 0.4%, lower than August by 0.2 percentage points. The core CPI, which excludes food and energy, also saw a decline in year-on-year growth by 0.2 percentage points to 0.1%, reaching a new low since March 2021, highlighting the more prominent issue of insufficient demand.
September’s PPI decreased by 2.8% year-on-year, expanding by 1 percentage point compared to August. On a month-on-month basis, PPI dropped by 0.6% in September, marking the lowest level since April 2024.
According to Reuters, China’s September CPI only increased by 0.4% year-on-year, lower than the 0.6% predicted in Reuters’ previous survey. Additionally, the 2.8% year-on-year decrease in September’s PPI, exceeding the contraction in August, indicates that China still faces deflationary pressure.
Financial news reports indicate that both September CPI and PPI fell below market expectations. Recent surveys conducted among 14 domestic and international institutions showed that economists had predicted an average year-on-year CPI growth rate of 0.6% for September, with a forecast range of 0.3% to 0.9%. The average forecast for PPI’s year-on-year growth was -2.5%, with a predicted range of -2.7% to -2.2%, suggesting that the actual decrease in PPI for the month exceeded the lower end of the forecast range.
In terms of year-on-year comparisons for September’s CPI, the increase in food prices expanded by 0.5 percentage points to 3.3%, contributing to a roughly 0.61 percentage point rise in CPI. Prices of fresh vegetables, pork, and fresh fruits rose by 22.9%, 16.2%, and 6.7%, respectively, with their increases magnifying. Non-food prices shifted from a 0.2% increase to a 0.2% decrease, resulting in a roughly 0.19 percentage point decrease in CPI. Energy prices saw a 3.5% decrease, with industrial consumer goods prices seeing a 0.2% decline when excluding energy, consistent with the previous month. Service price growth slowed by 0.3 percentage points to 0.2%, with travel prices reversing from a 0.9% increase to a 2.1% decrease post-summer; airplane tickets and hotel accommodation costs widening their declines to 14.1% and 5.6%, respectively.
Regarding the year-on-year comparison for PPI in September, production materials and consumer goods prices dropped by 3.3% and 1.3%, respectively, extending by 1.3 and 0.2 percentage points. The latter’s decline was the largest since November 2009 and collectively contributed to a decrease of about 2.41 and 0.35 percentage points in PPI, respectively.
Eight industries including ferrous metal smelting and rolling processing, petroleum and natural gas extraction, petroleum, coal, and other fuel processing, non-metallic mineral products manufacturing, agricultural and sideline food processing, chemical raw material and chemical product manufacturing, electrical machinery and equipment manufacturing, and coal mining and washing collectively accounted for about a 2.04 percentage point decrease in PPI, exceeding 70% of the total decline. Their downward impact on PPI increased by 0.74 percentage points compared to August.