Deflationary pressures China They do not disappear, which underlines the weakness Economic recovery Enters the house in 2023. The data will be released on Thursday Perhaps Chinese consumer prices will show that They fell back into deflation in October, according to economists polled by Bloomberg. Producer prices are likely to decline for the 13th consecutive month..
Consumer spending has remained stubbornly weak this year. The Consumer Price Index hit deflation in July It has since teetered on the edge of negative annual growth. Although the People’s Bank of China said in August that prices would recover from a bad summer streak, a fresh drop could show that this estimate is too optimistic.
Morgan Stanley believes China will face a protracted struggle against falling prices in the coming yearsBeijing recently wrote that it is “in the early stages of the war against inflation.”An exaggerated, debt-fueled growth model“.
Weak inflation figures add to that Greater uncertainty for the country’s growth prospects After an unexpected contraction in manufacturing activity and a slowdown in service sector growth in October.
“Consumer demand in China remains weak,” Macquarie Group Ltd. said. Larry Hu, head of China Economics, said the biggest contraction in China’s economy has come in recent years. According to him, the Gross Domestic Product (GDP) deflator, A broad measure of country pricesThe last three months of the year may be negative. It has already fallen for two consecutive quarters, the first time since 2015, according to Bloomberg estimates based on official data.
China: Data released may not be favorable
Other reports in the coming days may provide more clues about the path of the economic recovery. Export figures will pick up on Tuesday They show that the fall in October has moderated on a year-on-year basisAlthough this was partly due to a month in 2022, China was still struggling with pandemic-related lockdowns.
Last month credit data may be published, Could show a rebound in global financing than a year ago, due to an avalanche of government bonds hitting the market.
Expectations are rising that the central bank will provide Greater liquidity through a cut in the required reserve ratio, which is the amount of money banks must hold in reserve. Some analysts predict the central bank may do so before monthly lending measures in mid-November, as increased public lending puts pressure on interbank liquidity.
Chinese Prime Minister He pledged last Sunday that his country would expand market access It will also increase imports which have fallen this year.
“We will continue to promote opening up with greater inclusion and benefit-sharing,” he said in a speech opening the China International Import Expo in Shanghai on Sunday.Imports will be aggressively expanded“.
