BEIJING- China’s consumer price index in February missed expectations and fell at the sharpest pace in 13 months, while producer price deflation persisted, as seasonal demand faded and households remained cautious about spending amid job and income worries.
Beijing last week vowed greater efforts to boost consumption in the face of an escalating trade war with the US but analysts expect deflationary pressures in the world’s second-largest economy to drag on.
The government set the 2025 economic growth target at around 5 percent, unchanged from last year, while lowering the annual inflation target to around 2 percent from around 3 percent last year.
The consumer price index (CPI) fell 0.7 percent last month from a year earlier, reversing January’s 0.5 percent increase, data from the National Bureau of Statistics (NBS) showed on Sunday.
It was the first contraction in the index since January 2024, and worse than a 0.5 percent slide estimated by economists in a Reuters poll.
“China’s economy still faces deflationary pressure. While sentiment was improved by the developments in the technology space, domestic demand remains weak,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
As exports face risks from the trade war, fiscal policy needs to become more proactive, he said, noting that China’s property sector also continues to struggle.
