China CPI, PPI inflation ease further in Nov amid COVID disruptions
2022.12.08 21:19
© Reuters.
By Ambar Warrick
Investing.com– Chinese inflation eased further in November, data showed on Friday, as COVID-related disruptions hampered economic activity and saw both consumers and businesses cut back spending.
China’s fell to an annualized 1.6% in November from 2.1% in the prior month, data from the National Bureau of Statistics showed. The reading was in line with market estimates.
On a monthly basis, the shrank 0.2% after marking a similar contraction in the prior month.
The , which gauges inflation for manufacturing materials, fell at an annualized 1.3% in November- the same pace as seen in October. The reading was slightly better than estimates for a contraction of 1.4%, but remained at its weakest level in two years.
The inflation readings come on the heels of data that showed a sustained decline in Chinese business activity. The country’s and sectors contracted for a third straight month in November, as rising COVID-19 cases invited new restrictions on activity.
The country’s zero-COVID policy is at the heart of its economic slowdown this year, with lockdowns in several major cities having severely dented both economic activity as well as sentiment.
Still, inflation is likely to perk up in the coming months as China begins to unwind several anti-COVID measures. The shift in policy comes amid increasing public opposition to the zero-COVID policy, as well as worsening economic conditions.
Beijing had this week scaled back several nationwide movement curbs and testing mandates, signaling that the government now intends to eventually withdraw the zero-COVID policy.
But the country is still struggling with a record-high increase in infections, which could delay a broader reopening.
Economic growth is also expected to remain under pressure, especially if COVID infections increase drastically in the face of easing restrictions.
Data on , and for November, which is set to be released next week, is also expected to show a sustained decline.
The strengthened 0.3% after Friday’s data, largely taking support from a weaker dollar.
