November 14, 2023

 

Pork helps pull down consumer prices in China

 

 

 

Pork plays a significant role in the drop of China's consumer prices, which fell more than expected last month and thus put the country back into deflation.

 

The development renews concerns about the strength of the world's second largest economy.

 

China's National Bureau of Statistics (NBS) said on November 9 that the consumer price index (CPI) edged down 0.2% in October compared to the same month a year ago. The decline exceeded the 0.1% fall forecast by a Reuters poll of analysts.

 

The drop was mainly attributed to falling food prices, particularly pork, which has been sliding for months and is down 30% compared to a year ago, according to Goldman Sachs analysts.

 

Pork prices have been under pressure as increased supply of the meat has outstripped demand. As China's most consumed meat, pork has an outsized weighting in the consumer price index.

 

Core inflation, which strips away the traditionally volatile categories of fresh food and energy, fell even more sharply in October, by 0.6%.

 

Economists said that's bad news as it reflects low consumer demand in general.

 

China briefly slipped into deflation in July, with CPI falling by 0.3%. But consumer prices recovered in August.

 

The country is grappling with an uneven economic recovery as it battles a series of challenges, including an ailing property market and heightened reluctance among some businesses and consumers to invest or spend.

- CNN