China's deflation has reached a 15-year high
Economy
China's consumer price index (CPI) fell 0.8 per cent year-on-year in January 2023, the biggest decline since 2009.
Experts speculate that this decline is due to reduced consumer demand due to weak economic recovery after the COVID-19 pandemic, and prices have fallen for the fourth consecutive month.
Some economists believe that the January decline may also be due to seasonal factors. According to the National Bureau of Statistics of the People's Republic of China, the significant drop in prices in January 2024 is due to the fact that last January prices rose by 2.1% due to the Lunar New Year celebration from 21 to 27 January. This year, the holiday fell in early February.
"Given the more favourable seasonal conditions for February, we would expect January's data to be the lowest," notes Lynn Song, chief economist at ING Economics.
Some economists believe that the January decline may also be due to seasonal factors. According to the National Bureau of Statistics of the People's Republic of China, the significant drop in prices in January 2024 is due to the fact that last January prices rose by 2.1% due to the Lunar New Year celebration from 21 to 27 January. This year, the holiday fell in early February.
"Given the more favourable seasonal conditions for February, we would expect January's data to be the lowest," notes Lynn Song, chief economist at ING Economics.
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